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    Reporting Bonds Issued at Par LO 10-2

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    P10-2 Reporting Bonds Issued at Par LO 10-2

    On January 1, 2014, Nowell Company issued $500,000 in bonds that mature in five years. The bonds have a stated interest rate of 8 percent and pay interest on June 30 and December 31 each year. When the bonds were sold, the market rate of interest was 8 percent. (If necessary, use the appropriate factor(s) from the tables provided.) (FV of $1 PV of $1 FVA of $1 PVA of $1 )

    Required:
    1 What was the issue price on January 1, 2014?

    Issue price

    2 What amount of interest expense should be recorded on (a) June 30, 2014? and (b) December 31, 2014?

    June 30, 2014 December 31, 2014
    Interest expense

    3 What amount of cash interest should be paid on (a) June 30, 2014? and (b) December 31, 2014?

    June 30, 2014 December 31, 2014
    Cash paid

    4 What is the book value of the bonds on (a) December 31, 2014? and (b) December 31, 2015?

    December 31, 2014 December 31, 2015
    Bonds payable

    (See attached file)

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    This solution provides answers to various questions regarding bonds in Excel

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