On January 1 2009 Branagh Company issued for 1 075 230

its
On January 1, 2009, Branagh Company issued for $1,075,230 its 20-year, 13% bonds that have
a maturity value of $1,000,000 and pay interest semiannually on January 1 and July 1. Bond
issue costs were not material in amount. On the next page are three presentations of the long-
term liability section of the balance sheet that might be used for these bonds at the issue
date.Instructions(a) Discuss the conceptual merit(s) of each of the date-of-issue balance sheet
presentations shown above for these bonds.(b) Explain why investors would pay $1,075,230 for
bonds that have a maturity value of only $1,000,000.(c) Assuming that a discount rate is needed
to compute the carrying value of the obligations arising from a bond issue at any date during the
life of the bonds, discuss the conceptual merit(s) of using for this purpose:(1) The coupon or
nominal rate.(2) The effective or yield rate at date of issue.(d) If the obligations arising from
these bonds are to be carried at their present value computed by means of the current market
rate of interest, how would the bond valuation at dates subsequent to the date of issue be
affected by an increase or a decrease in the market rate ofinterest?
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On January 1 2009 Branagh Company issued for 1 075 230 its
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