Problem
On Feb 1, 2014 a company issued a 5-year, $100,000 face value bonds that pay interest semiannually on Feb 1 and Aug 1. The 8% bonds are date Feb 1, 2014. The market interest rate is 10%.
a. Using the appropriate factor table determine the amount received by the company on Feb 1, 2014
b. Prepare an amortization table for each year of the bond.
c. Prepare all necessary entries for 2014
Refer to problem 1. Assume that the bonds were issued on May 1, 2014, instead of Feb 1, 2014. All other variables remain the same.
a. Make the entries for the issuance of the bond and the first interest payment.