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ch 10 19 - Assig nment Pr int View Us e Table PV-1(in Ex...

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1/30/2014 Assignment Print View http://ezto.mhecloud.mcgraw-hill.com/hm_accounting.tpx?todo=printview 19/21 Use 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 $50,000,000 face value, 9 percent, 10-year bonds payable, with interest dates of December 31 and June 30. The bonds were issued at a discount, resulting in an effective semiannual interest rate of 5 percent. a. Compute the issue price for the bond that results in an effective semiannual interest rate of 5 percent. (Hint: Discount both the interest payments and the maturity value over 20 semiannual periods.) (Round your PV factor to 3 decimal places and final answer to the nearest dollar amount. Omit the "$" sign in your response.) Issuance price $ 46,884 b. 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. Omit the "$" sign in your response.) Date General Journal Debit Credit
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