Question

Kindly answer the following. Thank you so much!!!
Hartford Research issues bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds have a $37,000 par value and an annual contract rate of 12%, and they mature in 10 years. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided. Round all table values to 4 decimal places, and use the rounded table values in calculations.) Required: Consider each of the following three separate situations. 1. The market rate at the date of issuance is 10% (a) Complete the below table to determine the bonds' issue price on January 1, 2017 (b) Prepare the journal entry to record their issuance. 2. The market rate at the date of issuance is 12%. (a) Complete the below table to determine the bonds' issue price on January 1, 2017 (b) Prepare the journal entry to record their issuance. 3. The market rate at the date of issuance is 14% (a) Complete the below table to determine the bonds' issue price on January 1, 2017 (b) Prepare the journal entry to record their issuance. Complete th is question by entering your answers in the tahs helow

Answer 1

Part 1
Table values are based on:
n=	20
i=	5.0%
Cash Flow	Table Value	Amount	Present Value
Interest	12.46221	$2,220	$27,666
Principal	0.37689	$37,000	$13,945
Price of Bonds			$41,611
	Date	Accounts and explanation	Debit(in $)	Credit(in $)
	01-Jan-17	Cash	$41,611
		Bonds Payable		$37,000
		Premium on Bonds Payable		$4,611
Part 2
Table values are based on:
n=	20
i=	6.0%
Cash Flow	Table Value	Amount	Present Value
Interest	11.46992	$2,220	$25,463
Principal	0.3118	$37,000	$11,537
Price of Bonds			$37,000
	Date	Accounts and explanation	Debit(in $)	Credit(in $)
	01-Jan-17	Cash	$37,000
		Bonds Payable		$37,000
Part 3
Table values are based on:
n=	20
i=	7.0%
Cash Flow	Table Value	Amount	Present Value
Interest	10.59401	$2,220	$23,519
Principal	0.25842	$37,000	$9,562
Price of Bonds			$33,080
	Date	Accounts and explanation	Debit(in $)	Credit(in $)
	01-Jan-17	Cash	$33,080
		Discount on Bonds payable	$3,920
		Bonds Payable		$37,000