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Problem 14-7AA Computing bond price and recording issuance LO C2 Hartford Research issues bonds dated January 1 that pay inteRequired 1A Required 1B Required 2A Required 2B Required 3A Required 3B Complete the below table to determine the bonds issuRequired 1A Required 1B Required 2A Required 2B Required 3A Required 3B Prepare the journal entry to record their issuance, iRequired 1A Required 1B Required 2A Required 2B Required 3A Required 3B Complete the below table to determine the bonds issuRequired 1A Required 1B Required 2A Required 2B Required 3A Required 3B Prepare the journal entry to record their issuance, iRequired 1A Required 1B Required 2A Required 2B Required 3A Required 3B Complete the below table to determine the bonds issuRequired 1A Required 1B Required 2A Required 2B Required 3A Required 3B Prepare the journal entry to record their issuance, i

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Answer #1
Bond details
Par value 25000
Rate 10% Semi annualally
Time 10 years
1 Market Rate on Date of Issuance =8%
Table Values are Based on
n= 20
i= .04
Cash Flow Table Value Amount Present Value
Par(Maturity ) Value 0.45638 25000 $ 11,409.50
Interest Annuity 13.59000 1250 $ 16,987.50
Price Of Bonds $ 28,397.00
Journal Entry

1 January

Bank A/c - Dr $ 28,397.00
         To 10% Bonds $ 25,000.00
         To Premium on issue of bonds $   3,397.00
2 Market Rate on Date of Issuance = 10%
Table Values are Based on
n= 20
i= .05
Cash Flow Table Value Amount Present Value
Par(Maturity ) Value 0.37688 25000 $           9,422
Interest Annuity 12.46220 1250 $         15,578
Price Of Bonds $         25,000
Journal Entry
1-Jan Bank A/c - Dr $ 25,000.00
         To 10% Bonds $ 25,000.00
3 Market Rate on Date of Issuance = 12%
Table Values are Based on
n= 20
i= .05
Cash Flow Table Value Amount Present Value
Par(Maturity ) Value 0.10366 25000 $   2,591.50
Interest Annuity 7.46940 1250 $   9,336.75
Price Of Bonds $ 11,928.25
Journal Entry
1-Jan Bank A/c - Dr $ 11,928.25
Discount on Issue of Bonds $ 13,071.75
                To 10% Bonds $ 25,000.00
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