1/30/2014Assignment Print Viewhttp://ezto.mhecloud.mcgraw-hill.com/hm_accounting.tpx?todo=printview19/21Use Table PV-1 (in Exhibit B-7) and Table PV-2 (in Exhibit B-9)On June 30 of the current year, Rural Gas & Electric Co. issued $50,000,000 face value, 9 percent, 10-yearbonds payable, with interest dates of December 31 and June 30. The bonds were issued at a discount,resulting in an effective semiannualinterest rate of 5 percent.a.Compute the issue price for the bond that results in an effective semiannual interest rate of 5 percent.(Hint: Discount both the interest payments and the maturity value over 20 semiannual periods.) (Roundyour PV factor to 3 decimal places and final answer to the nearest dollar amount. Omit the "$"sign in your response.)Issuance price$ 46,884b.Prepare a journal entry to record the issuance of the bonds at the sales price you computed in part a.(Round your PV factor to 3 decimal places and final answer to the nearest dollar amount. Omitthe "$" sign in your response.)DateGeneral JournalDebitCredit
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