On January 1,
2018, Swan Company issued bonds with the following
characteristics:
Face Value (per bond)
$
1,000
Number of bonds...
60.1K
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Question
Accounting
On January 1,2018, Swan Company issued bonds with the followingcharacteristics:
Face Value (per bond)
$ 1,000
Number of bonds issued
2,000
Coupon (stated) rate
7%
Maturity date
5
Interest payments
Annually
Prevailing rate of interest in the market on January 1, 2018 =8%
1) Determine the total value of the bonds on January 1, 2018
2) Provide anamortization schedule with the following columns (5 points):
Date
Interest Payment
Interest Expense
Amortization
Carrying Value
1/1/2018
12/31/2018
12/31/2019
12/31/2020
12/31/2021
12/31/2022
3) Provide the January 1, 2018journal entry
Answer & Explanation
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4.3 Ratings (879 Votes)
All working forms part of the answer Requirement 1 Total Value of Bonds No of bonds x Face value per bond 2000 x 1000 2000000 Carrying Value Issue Price is calculated below Bond Face Value Market Interest
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