On January 1, 2024, Instaform, Incorporated, issued 12% bonds with a face amount of $75 million, dated January 1. • The bonds mature in 2043 (20 years). • The market yield for bonds of similar risk and maturity is 14%. Interest is paid semiannually. Required: 1-0. Determine the price of the bonds at January 1, 2024. 1-b. Prepare the journal entry to record their issuance by Instaform 2-a. Assume the market rate was 11%. Determine the price of the bonds at January 1, 2024. 2-b. Assume the market rate was 11%. Prepare the journal entry to record their issuance by Instaform. 3. Assume Broadcourt Electronics purchased the entire issue in a private placement of the bonds. Using the data in requirement 2, prepare the journal entry to record the purchase by Broadcourt. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of SJ. EVAD of 51 and PVAD of $1)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 1, 2024, Instaform, Incorporated, issued 12% bonds with a face amount of $75 million, dated January 1.
The bonds mature in 2043 (20 years).
The market yield for bonds of similar risk and maturity is 14%.
• Interest is paid semiannually.
Required:
1-8. Determine the price of the bonds at January 1, 2024.
1-b. Prepare the journal entry to record their issuance by Instaform.
2-a. Assume the market rate was 11%. Determine the price of the bonds at January 1, 2024.
2-b. Assume the market rate was 11%. Prepare the journal entry to record their issuance by Instaform.
3. Assume Broadcourt Electronics purchased the entire issue in a private placement of the bonds. Using the data in requirement 2,
prepare the journal entry to record the purchase by Broadcourt.
Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of SJ. EVAD of 51 and PVAD of S1)
Complete this question by entering your answers in the tabs below.
Req 1A
Req 18
Req 2A
Reg 28
Determine the price of the bonds at January 1, 2024.
Note: Enter your answer in whole dollars.
Price of the bonds
Req 3
Transcribed Image Text:On January 1, 2024, Instaform, Incorporated, issued 12% bonds with a face amount of $75 million, dated January 1. The bonds mature in 2043 (20 years). The market yield for bonds of similar risk and maturity is 14%. • Interest is paid semiannually. Required: 1-8. Determine the price of the bonds at January 1, 2024. 1-b. Prepare the journal entry to record their issuance by Instaform. 2-a. Assume the market rate was 11%. Determine the price of the bonds at January 1, 2024. 2-b. Assume the market rate was 11%. Prepare the journal entry to record their issuance by Instaform. 3. Assume Broadcourt Electronics purchased the entire issue in a private placement of the bonds. Using the data in requirement 2, prepare the journal entry to record the purchase by Broadcourt. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of SJ. EVAD of 51 and PVAD of S1) Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2A Reg 28 Determine the price of the bonds at January 1, 2024. Note: Enter your answer in whole dollars. Price of the bonds Req 3
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