Newton Company issued $536,000, 7%, 10-year bonds on December 31, 2013, for $493,120. Interest is payable semiannually on June 30 and December 31. Newton Company uses the straight-line method to amortize bond premium or discount.
Prepare the journal entries to record the following.(Credit account titles are automatically indented when amount is entered. Do not indent manually.)
| (a) | The issuance of the bonds. |
| (b) | The payment of interest and the discount amortization on June 30, 2014. |
| (c) | The payment of interest and the discount amortization on December 31, 2014. |
| (d) | The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. |
| No. | Date | Account Titles and Explanation | Debit | Credit |
| (a) | Dec. 31, 2013 | |||
| (b) | June 30, 2014 | |||
| (c) | Dec. 31, 2014 | |||
| (d) | Dec. 31, 2023 | |||
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Styx Corporation is issuing $244,500 of 12%, 5-year bonds when potential bond investors want a return of 14%. Interest is payable semiannually. Compute the market price (present value) of the bonds.(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. $12,520.)
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