Oct 2 - ORIE 3150 ICE October 2, 2008 1. On March 1, 2004,...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
ORIE 3150 ICE October 2, 2008 1. On March 1, 2004, Squeeks Corporation issued a $1,000,000 face value bond with 10% face interest rate and a maturity of 15 years. The semi-annual interest payments are made on March 1 and September 1. The bond was issued at such a price as to yield 9.6%. a. What was the issue price of the bond? b. Prepare the journal entry to record the sale of the bond on March 1, 2004. c. Prepare the journal entries to record the payment of interest and amortization on September 1, 2004, and on March 1, 2005. Use the effective interest method. 2. On March 1, 2001, Weeks Corporation issued a $600,000 face value bond with 10% face interest rate and a maturity of 5 years. The semi-annual interest payments are made on March 1 and September 1. The bond was issued at a discount for $584,400. a. What is the effective yield of the bond? b. Prepare the journal entry to record the sale of the bond on March 1, 2001. c. Prepare the journal entries to record the payment of interest and amortization on
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/07/2008 for the course ORIE 3150 taught by Professor Callister during the Summer '08 term at Cornell University (Engineering School).

Ask a homework question - tutors are online