Reference no: EM132575514

Texxon corporation issued $200,000 of 10- year bonds with a payment rate of 6%; payments are made semi annually. I assume the market interest rate for similar investments is 4%, compounded semiannually.

Question 1). What is a semi annual cash payment amount for this bond issue?

Question 2). What is the present value (Issue price) of this bond issue at the market rate of interest?

Question 3). How much bond interest expense should be recorded on the first semi annual interest payment due?

Question 4). These bones would be issued at a premium (I E your answer to question two should be more than $200,000). What amount of premium will be amortized on the first semi annual interest payment date?

Question 5). What is the carrying value of the bonds after the first semi annual interest payment date (i.e. what amount of debt will be left)?

Question 6). The journal entry that would be made To record the issue of the bonds would include:

Question 7). The journal entry that would be made when the first payment is made to the bondholders would include:

Question 8). The journal entry that would be made when the final payment of $200,000 is made to the bondholders would include