Compute the balance sheet value of the bond liability

Assignment Help Finance Basics

Reference no: EM131408133

Tingham Village issued 500 five-year bonds on July 1, 2012. The interest payments are due semiannually (January 1 and July 1) at an annual rate of 6 percent. The effective interest rate on the bonds is 8 percent. The face value of each bond is $1,000.

a. Prepare the journal entry that would be recorded on July 1, 2012, when the bonds are issued.

b. Prepare the journal entry that would be recorded on December 31, 2012.

c. Compute the balance sheet value of the bond liability as of December 31, 2012.

d. Compute the present value of the bond's remaining cash flows as of December 31, 2012, using an effective interest rate of 8 percent. Explain the relationship between the balance sheet value and the present value

Reference no: EM131408133

Questions Cloud

Build-it home improvement stores-sweden : Read the case found below and write a two- to three-page paper (excluding title and reference pages), according to APA style guidelines, on the following items.

Identify if a firewall is enabled on your machine : You have been asked to provide a summary of information to the entire team about data breaches and suggest proactive and preventative measures for warding off viruses. Your presentation will be sent out to all company employees, so the information..

Compute the proceeds of each bond issuance : For each bond issuance, indicate whether the balance sheet value of the bond liability will increase, decrease, or remain constant over the life of the bond.

Essay on the novel twentieth-century crime fiction : Write an essay on the novel Twentieth-Century Crime Fiction - Use your own thoughts combine the novel story, simple language and words

Compute the balance sheet value of the bond liability : Tingham Village issued 500 five-year bonds on July 1, 2012. The interest payments are due semiannually (January 1 and July 1) at an annual rate of 6 percent. The effective interest rate on the bonds is 8 percent. The face value of each bond is $1,..

Validate your html code using the markup validation service : Incorporate the following into your expanded website:Apply Cascading Style Sheets (CSS) to format elements.Integrate multimedia into the website.Create navigation for the site.Use internal, external, and anchor links in the website.

Company contribute to company overall effectiveness : Internal processes of a company contribute to the company's overall effectiveness. Identifying ways to improve internal processes helps build a highly efficient organization. Root causes need to be identified. Methods to identify root causes may r..

How was the loss disclosed on the income statement : Lilly uses the indirect method of presentation for the statement of cash flows. How was the loss treated on that statement?

When considering organizational operations : When considering organizational operations, does going green necessarily mean going lean? If so, in what aspect or industry? If not, why not and where does this not work? Please remember to cite your source and reference 150 word count

User Account

All Pages