Hartford Research issues bonds dated January 1, 2016, that pay interest semiannually on June 30 and...

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Finance

Hartford Research issues bonds dated January 1, 2016, that payinterest semiannually on June 30 and December 31. The bonds have a$22,000 par value and an annual contract rate of 12%, and theymature in 10 years. (Table B.1, Table B.2, Table B.3, and TableB.4) (Use appropriate factor(s) from the tablesprovided.)

Required:
Consider each of the following three separate situations.

1. The market rate at the date of issuance is10%.
(a) Complete the below table to determine the bonds'issue price on January 1, 2016.
Table values are based on:
n =
i =
Cash Flow Table Value Amount Present Value
Par (maturity) value
Interest (annuity)
Price of bonds
(b) Prepare the journal entry to record theirissuance.
Record the issue of bonds with a par value of $22,000 cash onJanuary 1, 2016. Assume that the market rate of interest at thedate of issue is 10%.
2. The market rate at the date of issuance is12%.
(a) Complete the below table to determine the bonds'issue price on January 1, 2016.
Table values are based on:
n =
i =
Cash Flow Table Value Amount Present Value
Par (maturity) value
Interest (annuity)
Price of bonds
(b) Prepare the journal entry to record theirissuance.
Journal entry worksheet
Record the issue of bonds with a par value of $22,000 cash onJanuary 1, 2016. Assume that the market rate of interest at thedate of issue is 12%.

3. The market rate at the date of issuance is14%.
(a) Complete the below table to determine the bonds'issue price on January 1, 2016.
Table values are based on:
n =
i =
Cash Flow Table Value Amount Present Value
Par (maturity) value
Interest (annuity)
Price of bonds
Record the issue of bonds with a par value of $22,000 cash onJanuary 1, 2016. Assume that the market rate of interest at thedate of issue is 14%.

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Face Value 22000Annual Coupon Rate 12Semiannual Coupon Rate See Answer

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Hartford Research issues bonds dated January 1, 2016, that payinterest semiannually on June 30 and December 31. The bonds have a$22,000 par value and an annual contract rate of 12%, and theymature in 10 years. (Table B.1, Table B.2, Table B.3, and TableB.4) (Use appropriate factor(s) from the tablesprovided.) Required:Consider each of the following three separate situations. 1. The market rate at the date of issuance is10%.(a) Complete the below table to determine the bonds'issue price on January 1, 2016.Table values are based on:n =i =Cash FlowTable ValueAmountPresent ValuePar (maturity) valueInterest (annuity)Price of bonds(b) Prepare the journal entry to record theirissuance.Record the issue of bonds with a par value of $22,000 cash onJanuary 1, 2016. Assume that the market rate of interest at thedate of issue is 10%.2. The market rate at the date of issuance is12%.(a) Complete the below table to determine the bonds'issue price on January 1, 2016.Table values are based on:n =i =Cash FlowTable ValueAmountPresent ValuePar (maturity) valueInterest (annuity)Price of bonds(b) Prepare the journal entry to record theirissuance.Journal entry worksheetRecord the issue of bonds with a par value of $22,000 cash onJanuary 1, 2016. Assume that the market rate of interest at thedate of issue is 12%.3. The market rate at the date of issuance is14%.(a) Complete the below table to determine the bonds'issue price on January 1, 2016.Table values are based on:n =i =Cash FlowTable ValueAmountPresent ValuePar (maturity) valueInterest (annuity)Price of bondsRecord the issue of bonds with a par value of $22,000 cash onJanuary 1, 2016. Assume that the market rate of interest at thedate of issue is 14%.