Fabulator Inc produces and sells fashion clothing On July

1
Fabulator, Inc. produces and sells fashion clothing. On July 1, 2012, Fabulator, Inc. issued
$120,000,000 of 20-year, 14% bonds at a market (effective) interest rate of 11%, receiving cash
of $148,882,608. Interest on the bonds is payable semiannually on December 31 and June 30.
The fiscal year of the company is the calendar year.Instructions1. Journalize the entry to record
the amount of cash proceeds from the sale of the bonds.2. Journalize the entries to record the
following:a. The first semiannual interest payment on December 31, 2012, and the amortization
of the bond premium, using the straight-line method. (Round to the nearest dollar.)b. The
interest payment on June 30, 2013, and the amortization of the bond premium, using the
straight-line method. (Round to the nearest dollar.)3. Determine the total interest expense for
2012.4. Will the bond proceeds always be greater than the face amount of the bonds when the
contract rate is greater than the market rate of interest?5. (Appendix 1) Compute the price of
$148,882,608 received for the bonds by using the tables of present value in Appendix A at the
end of the text. (Round to the nearest dollar.)View Solution:
Fabulator Inc produces and sells fashion clothing On July 1
SOLUTION-- http://expertanswer.online/downloads/fabulator-inc-produces-and-sells-fashion-
clothing-on-july-1/

See Answer here expertanswer.online

Powered by TCPDF (www.tcpdf.org)