Reference no: EM131208481
Analyzing and journalizing bond transaction
On January 1, 2014, Merchandise Credit Union (MCU) issued 7%, 20- year bonds payable with face value of $300,000. The bonds pay interest on June 30 and December 31.
Requirements
1. If the market interest is 6% when MCU issues its bonds, will the binds the priced at face value, at a premium, or at a discount? Explain.
2. If the market interest is rate 8% when MCU issues its bonds, will the bonds be priced at a face value, at a premium or at a discount? Explain.
3. The issues price of the bonds is 95. Journalize the following bond transactions:
a. Issuance of bonds January 1, 2014.
b. Payment of interest and amortization June 30, 2014
c. Payment of interest and amortization December 31, 2014.
d. Retirement of the bond at a maturity on December 31, 2014
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Analyzing and journalizing bond transaction
: On January 1, 2014, Merchandise Credit Union (MCU) issued 7%, 20- year bonds payable with face value of $300,000. The bonds pay interest on June 30 and December 31. If the market interest is 6% when MCU issues its bonds, will the binds the priced at ..
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