Bond Premium and Discount
Markway Inc. is contemplating selling bonds. The issue is to be composed of 750 bonds, each with a face amount of $1,000.
Required:
1.Calculate how much Markway is able to borrow if each bond is sold at a premium of $30.$fill in the blank c8bef3083f9e067_1
2.Calculate how much Markway is able to borrow if each bond is sold at a discount of $10.$fill in the blank c8bef3083f9e067_2
3.Calculate how much Markway is able to borrow if each bond is sold at 92% of par.$fill in the blank c8bef3083f9e067_3
4.Calculate how much Markway is able to borrow if each bond is sold at 103% of par.$fill in the blank c8bef3083f9e067_4
1 & 2. Calculate the issue price for each bond then consider the total number of bonds to calculate total proceeds.
3 & 4. The par value is the same as face value.
5.Assume that the bonds are sold for $975 each. Prepare the entry to recognize the sale of the 750 bonds. If an amount box does not require an entry, leave it blank.
5. When bonds are issued, any premium or discount is recorded in a separate valuation account.
6.Assume that the bonds are sold for $1,015 each. Prepare the entry to recognize the sale of the 750 bonds. If an amount box does not require an entry, leave it blank.
Already registered? Login
Not Account? Sign up
Enter your email address to reset your password
Back to Login? Click here