On Jan 1st, 2021, Canning Co. sold 100,000 cans. Each can cost Canning Co. $0.02...
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On Jan 1st, 2021, Canning Co. sold 100,000 cans. Each can cost Canning Co. $0.02 to produce. Canning Co. received a 3 year bond with the face amount of $10,000 with a stated rate of 5% compounded annually. The market rate for similar bonds is 6%. Canning Co. prepares financial statements once every year. Canning uses perpetual inventory.
1) What is the present value of the bond received?
2) Provide the transactional journal entries associated with this transaction on Jan 1st, 2021
3) Provide the transactional journal entries dated December 31st, 2021 when the first interest payment is received.
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