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Exam #4 : Chapters 910, and company issued 92% 10-year bonds with a par value of S100 000. Interest is paid semiannually. The nteffective interest method for amortization. On the first semiannual interest date, what , n 15. A annual market nterest rate on the issue date was 10%, and the issuer received $95,016 cash for the bonds. amount of discount should the issuer amortize? Discount amortized he bonds pay 16. On January 1, a company issued 10%, 10-year bonds payable with a par value of$720,000, interest on July 1 and January 1. The bonds were issued for $817.860 cash, which provided the holders an annual yield of 8% Prepare the journal entry to record the first semiannual interest payment, assuming i uses the straight-line method of amortization. General Journal Date Credit Account Description Debit On January 1, a company issues 8%, 5 year $300,000 bonds that pay interest semiannually each June 30 and December 31-On the issue date, the annual market rate of interest is 6%. Compute the price of the bonds on their issue date. The following information is taken from present value tables: 17 Present value of an annuity for 10 periods 8.5302 at 3% Present value of an annuity for 10 periods 1109 at 4% Present value of I due in 10 periods at 3% 10.7441 Present value of l due in 10 periods at 4% 1.6756 Present value of principle Present value of interest Issue (selling) price of bonds On January 1 , a company issued 10-year, 10% bonds payable with a par value of SS00 000, and received $442,647 in cash proceeds. The market rate of interest at the date of issuance was 12%. The bonds pay interest semiannually on July 1 and January 1. The issuer uses the straight-line method for amortization. Prepare the issuer's journal entry to record the first semiannual interest payment on July 1 18 General Journal Debit Credit Date Account Description 6 of 10

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