park corporation is planning to issue bonds with a face value of $2,004,000 and a coupon rate of 10 percent. the bonds mature in 15 years and pay interest semiannually every june 30 and december 31. all of the bonds were sold on january 1 of this year. park uses the effective-interest amortization method and does not use a premium account. assume an annual market rate of interest of 8.5 percent. (fv of $1, pv of $1, fva of $1, and pva of $1) note: use appropriate factor(s) from the tables provided. required: 1. and 2. prepare the journal entry to record the issuance of the bonds and the interest payment on june 30 of this year. 3. what bonds payable amount will park report on its june 30 balance sheet?

Question

contestada

Respuesta :

dipankarkundu4589 dipankarkundu4589 · Answer 1 · 2022-12-07T07:17:48+01:00

Bond Payable will be reported at the value of $2157080 [$2252825.85-95745.10] on its june 30 balance sheet.

PRICE of Bond = Present value of sum of interest payment in future + PV of redemptioon amount

n = 15 years*2 = 30 periods

req. rate of return (i)= 8.5%/2 = 4.25%

interest = $2,001,000*4.5% = $100050

Present value of sum of interest payment = Interest * (Sum of PV of rate of intt * n years)

= $100,050*SUM OF pvf Of 4.25% for 30 periods = $100,050*16.779

= $ 1,678,738.95

PV of redemtion amt = Redemption amount * PV of 4.25% of 30th period

= $2,001,000*0.2869 =$ 574,086.90

PV of Bond = $1,678,739+574,086 = $ 2,252,825.85

To Bond $ 2,001,000.00

Bond Payable will be reported at the value of $2157080 [$2252825.85-95745.10] on its june 30 balance sheet.

learn more about balance sheet here

https://brainly.com/question/19552006

#SPJ4