On January 1, 2021, Instaform, Inc., issued 12% bonds with aface amount of $45 million, dated January 1. The bonds mature in2040 (20 years). The market yield for bonds of similar risk andmaturity is 14%. Interest is paid semiannually. (FV of $1, PV of$1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Useappropriate factor(s) from the tables provided.)
Required:
1-a. Determine the price of the bonds at January 1,2021.
1-b. Prepare the journal entry to record theirissuance by Instaform.
2-a. Assume the market rate was 11%. Determine theprice of the bonds at January 1, 2021.
2-b. Assume the market rate was 11%. Prepare thejournal entry to record their issuance by Instaform.
3. Assume Broadcourt Electronics purchased theentire issue in a private placement of the bonds. Using the data inrequirement 2, prepare the journal entry to record the purchase byBroadcourt.
Please answer all questions from Req1A, 1B,2A,2B and Req3. Thankyou.
