Universal Foods issued 12% bonds, dated January 1, with a face amount of $175 million...
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Universal Foods issued 12% bonds, dated January 1, with a face amount of $175 million on January 1, 2016. The bonds mature on December 31, 2030 (15 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:
1. Determine the price of the bonds at January 1, 2016. (Enter your answer in whole dollars.
2. to 4. Prepare the journal entry to record their issuance by Universal Foods on January 1, 2016, interest on June 30, 2016 and interest on December 31, 2023. (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1. Record the issuance of the bond on January 1, 2016.
2. Record the interest on June 30, 2016.
3.Record the interest on December 31, 2023.
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