On January 1, 2018, Swan Company issued bonds with the following characteristics: Face Value (per bond) $ 1,000 Number of bonds...

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Accounting

On January 1,2018, Swan Company issued bonds with the followingcharacteristics:
Face Value (per bond) $ 1,000
Number of bonds issued 2,000
Coupon (stated) rate 7%
Maturity date 5
Interest payments Annually
Prevailing rate of interest in the market on January 1, 2018 =8%
1) Determine the total value of the bonds on January 1, 2018
2) Provide anamortization schedule with the following columns (5 points):
Date Interest Payment Interest Expense Amortization Carrying Value
1/1/2018
12/31/2018
12/31/2019
12/31/2020
12/31/2021
12/31/2022
3) Provide the January 1, 2018journal entry

Answer & Explanation Solved by verified expert

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All working forms part of the answer Requirement 1 Total Value of Bonds No of bonds x Face value per bond 2000 x 1000 2000000 Carrying Value Issue Price is calculated below Bond Face Value Market Interest See Answer

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