esWhen Patey Pontoons issued 8% bonds on January 1, 2024, with a face amount of $700,000, the market yield for bonds of similar riskand maturity was 9%. The bonds mature December 31, 2027 (4 years). Interest is paid semiannually on June 30 and December 31.Required:1. Determine the price of the bonds at January 1, 2024.2. Prepare the journal entry to record their issuance by Patey on January 1, 2024.3. Prepare an amortization schedule that determines interest at the effective rate each period.4. Prepare the journal entry to record interest on June 30, 2024.5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31, 2024?6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31, 2024?(Ignore income taxes.)7. Prepare the appropriate journal entries at maturity on December 31, 2027.Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)Complete this question by entering your answers in the tabs below.Req 1Req 2Req 3Req 4Req 5 and 6Req 7

When Patey Pontoons issued 8% bonds on January 1, 2024, with a face amount of $700,000, the market yield for bonds of similar risk and maturity was 9%. The bonds mature December 31, 2027 (4 years). Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2024. 2. Prepare the journal entry to record their issuance by Patey on January 1, 2024. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal

When Patey Pontoons issued 8% bonds on January 1, 2024, with a face amount of $700,000, the market yield for bonds of similar risk and maturity was 9%. The bonds mature December 31, 2027 (4 years). Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2024. 2. Prepare the journal entry to record their issuance by Patey on January 1, 2024. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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When Patey Pontoons issued 10% bonds on January 1, 2024, with a face amount of $880,000, the market yield for bonds of similar risk and maturity was 11%. The bonds mature December 31, 2027 (4 years). Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2024. 2. Prepare the journal entry to record their issuance by Patey on January 1, 2024. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30, 2024. 5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31, 2024? 6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31, 2024? (Ignore income taxes.) 7. Prepare the appropriate journal entries at maturity on December 31, 2027 Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1.…
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