Business, 12.03.2020 17:02, clarawulf9477

Young Co. issues $800,000 of 10% bonds dated January 1, Year 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in 5 years. The current market rate for similar bonds is 8%. The entire issue is sold on the date of issue. The following values are given: Present Value of Ordinary Annuity Present Value of $1 N Present Value of Present Value Ordinary Annuity of $1 N=10; i=0.04 8.11090 0.67556N=10; i=0.05 7.72173 0.61391(i) What amount of proceeds on the sale of bonds should Young report?

A) $799,997

B) $815,564

C) $849,317

D) $864,884

(ii) Prepare the journal entry to issue the bonds

(iii) Prepare the journal entry to record bond interest paid for year 2 using the effective interest method.

Answers: 2

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Young Co. issues $800,000 of 10% bonds dated January 1, Year 1. Interest is payable semiannually on...