QUIZ 8Texxon Corporation issued $500,000 of 10-year bonds with a payment rate of 8%; payments aremade semiannually. Assume that the market interest rate for similar investments is 6 percent,compounded semiannually. Do NOT use the straight-line method of amortizing the bondpremium (we did not use this method in class). Please show your work below to receive credit.1. What is the semi-annual cash payment amount for this bond issue?2. What is the present value (issue price) of this bond issue at the market rate of interest?3. How much bond interest expense should be recorded on the first semi-annual interestpayment date?4. These bonds would be issued at a premium (i.e., your answer to #2 should be more than$500,000). What amount of premium will be amortized on the first semi-annual interestpayment date?5. What is the carrying value of the bonds after the first semi-annual interest payment date?6. What journal entry would be made to record the issue of these bonds?7. What journal entry would be made when the first payment is made to the bondholders?8. What journal entry would be made when the final payment of $500,000 is made to thebondholders?
QUIZ 8Texxon Corporation issued $500,000 of 10-year bonds with a payment rate of 8%; payments aremade semiannually. Assume that the market interest rate for similar investments is 6 percent,compounded semiannually. Do NOT use the straight-line method of amortizing the bondpremium (we did not use this method in class). Please show your work below to receive credit.1. What is the semi-annual cash payment amount for this bond issue?2. What is the present value (issue price) of this bond issue at the market rate of interest?3. How much bond interest expense should be recorded on the first semi-annual interestpayment date?4. These bonds would be issued at a premium (i.e., your answer to #2 should be more than$500,000). What amount of premium will be amortized on the first semi-annual interestpayment date?5. What is the carrying value of the bonds after the first semi-annual interest payment date?6. What journal entry would be made to record the issue of these bonds?7. What journal entry would be made when the first payment is made to the bondholders?8. What journal entry would be made when the final payment of $500,000 is made to thebondholders?
QUIZ 8Texxon Corporation issued $500,000 of 10-year bonds with a payment rate of 8%; payments aremade semiannually. Assume that the market interest rate for similar investments is 6 percent,compounded semiannually. Do NOT use the straight-line method of amortizing the bondpremium (we did not use this method in class). Please show your work below to receive credit.1. What is the semi-annual cash payment amount for this bond issue?2. What is the present value (issue price) of this bond issue at the market rate of interest?3. How much bond interest expense should be recorded on the first semi-annual interestpayment date?4. These bonds would be issued at a premium (i.e., your answer to #2 should be more than$500,000). What amount of premium will be amortized on the first semi-annual interestpayment date?5. What is the carrying value of the bonds after the first semi-annual interest payment date?6. What journal entry would be made to record the issue of these bonds?7. What journal entry would be made when the first payment is made to the bondholders?8. What journal entry would be made when the final payment of $500,000 is made to thebondholders?
QUIZ 8Texxon Corporation issued $500,000 of 10-year bonds with a payment rate of 8%; payments aremade semiannually. Assume that the market interest rate for similar investments is 6 percent,compounded semiannually. Do NOT use the straight-line method of amortizing the bondpremium (we did not use this method in class). Please show your work below to receive credit.1. What is the semi-annual cash payment amount for this bond issue?2. What is the present value (issue price) of this bond issue at the market rate of interest?3. How much bond interest expense should be recorded on the first semi-annual interestpayment date?4. These bonds would be issued at a premium (i.e., your answer to #2 should be more than$500,000). What amount of premium will be amortized on the first semi-annual interestpayment date?5. What is the carrying value of the bonds after the first semi-annual interest payment date?6. What journal entry would be made to record the issue of these bonds?7. What journal entry would be made when the first payment is made to the bondholders?8. What journal entry would be made when the final payment of $500,000 is made to thebondholders?
