Part 2

On January 1 of this year, Nowell Company issued bonds with a face value of $280,000 and a coupon rate of 8.0 percent. The bonds mature in five years and pay interest semiannually every June 30 and December 31. When the bonds were sold, the annual market rate of interest was 8.0 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

Required:

1. What was the issue price on January 1 of this year? (Round your final answers to nearest whole dollar amount.)

Issue price

280,000

Part 3

On January 1 of this year, Nowell Company issued bonds with a face value of $280,000 and a coupon rate of 8.0 percent. The bonds mature in five years and pay interest semiannually every June 30 and December 31. When the bonds were sold, the annual market rate of interest was 8.0 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

On January 1 of this year, Nowell Company issued bonds with a face value of $280,000 and a coupon rate of 8.0 percent. The bonds mature in five years and pay interest semiannually every June 30 and December 31. When the bonds were sold, the annual market rate of interest was 8.0 percent. What amount of interest expense should be recorded on June 30 and December 31 of this year?

2. What amount of interest expense should be recorded on June 30 and December 31 of this year?

	June 30 December 31 Interest expense 280,000 280,000

Part 4

On January 1 of this year, Nowell Company issued bonds with a face value of $280,000 and a coupon rate of 8.0 percent. The bonds mature in five years and pay interest semiannually every June 30 and December 31. When the bonds were sold, the annual market rate of interest was 8.0 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

On January 1 of this year, Nowell Company issued bonds with a face value of $280,000 and a coupon rate of 8.0 percent. The bonds mature in five years and pay interest semiannually every June 30 and December 31. When the bonds were sold, the annual market rate of interest was 8.0 percent. What amount of cash is owed to investors on June 30 and December 31 of this year

3. What amount of cash is owed to investors on June 30 and December 31 of this year?

	June 30	December 31
Cash Owed	11200	11200

Part 5

On January 1 of this year, Nowell Company issued bonds with a face value of $280,000 and a coupon rate of 8.0 percent. The bonds mature in five years and pay interest semiannually every June 30 and December 31. When the bonds were sold, the annual market rate of interest was 8.0 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

4. What is the book value of the bonds on December 31 of this year? December 31 of next year?

	This Year	Next Year
Bonds Payable	280,000	280,000