Business, 13.09.2021 22:10, Rach23s

On January 1, 2021, NFB Visual Aids issued $760,000 of its 20-year, 8% bonds. The bonds were priced to yield 10%. Interest is payable semiannually on June 30 and December 31. NFB Visual Aids records interest expense at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2021, the fair value of the bonds was $636,000 as determined by their market value in the over-the-counter market. General (risk-free) interest rates did not change during 2021. Required:
1-a. Determine the price of the bonds at January 1, 2021.
1-b. Prepare the necessary Journal entries.
2. Record the issuance of bonds.
3. Record the first interest payment.
4. Record the second interest payment.
5. Record the entry to adjust the bonds to their fair value for presentation in the December 31, 2021 balance sheet.

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On January 1, 2021, NFB Visual Aids issued $760,000 of its 20-year, 8% bonds. The bonds were priced...