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1) Determine the price of a $1 million bond issue under each of the following independent...

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Accounting

1) Determine the price of a $1 million bond issue under each ofthe following independent assumptions:

MaturityInterest paidStated rateEffective (market) rate
110 yearsAnnually10%12%
210 yearsSemiannually10%12%
3
10 years
Semiannually (July 1 and January 1)12%10%
4
20 years
Semiannually12%10%
520 yearsSemiannually12%12%

2) Prepare journal entries to record the issuance for each ofthe following the above independent assumptions

3) Only for Assumption 1 and 2, prepare an amortization schedulethat determines interest at the effective rate.

Answer & Explanation Solved by verified expert
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formulas used for bond    See Answer
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