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  • Krabna Corporation Has 8 000 000 of 9 5 Percent 25 Year Bonds Dated

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    trilocksp Singh
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    Krabna Corporation issued $8,000,000 of 9.5% bonds with a 25-year term on March 1, 2014. The bonds pay interest semi-annually on February 28 and August 31. In requirement 1, the bonds were issued at a premium of 102.5% to yield an effective rate of 9.2%. In requirement 2, the bonds were issued at a discount of 97.5% to yield an effective rate of 9.8%. The document asks to prepare related journal entries and explain how market rates caused the premium in one case and discount in the other.

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    Krabna Corporation issued $8,000,000 of 9.5% bonds with a 25-year term on March 1, 2014. The bonds pay interest semi-annually on February 28 and August 31. In requirement 1, the bonds were issued at a premium of 102.5% to yield an effective rate of 9.2%. In requirement 2, the bonds were issued at a discount of 97.5% to yield an effective rate of 9.8%. The document asks to prepare related journal entries and explain how market rates caused the premium in one case and discount in the other.

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    © All Rights Reserved
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    19 views1 page

    Krabna Corporation Has 8 000 000 of 9 5 Percent 25 Year Bonds Dated

    Uploaded by

    trilocksp Singh
    Krabna Corporation issued $8,000,000 of 9.5% bonds with a 25-year term on March 1, 2014. The bonds pay interest semi-annually on February 28 and August 31. In requirement 1, the bonds were issued at a premium of 102.5% to yield an effective rate of 9.2%. In requirement 2, the bonds were issued at a discount of 97.5% to yield an effective rate of 9.8%. The document asks to prepare related journal entries and explain how market rates caused the premium in one case and discount in the other.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Krabna Corporation has 8 000 000 of 9 5 percent 25 year

    bonds dated
    Krabna Corporation has $8,000,000 of 9.5 percent, 25-year bonds dated March 1, 2014, with
    interest payable on February 28 and August 31. The company’s fiscal year end is February 28.
    It uses the effective interest method to amortize bond premiums or discounts. (Round to the
    nearest dollar.)Required1. Assume the bonds are issued at 102.5 on March 1, 2014, to yield an
    effective interest rate of 9.2 percent. Prepare the journal entries for March 1, 2014, August 31,
    2014, and February 28, 2015.2. Assume the bonds are issued at 97.5 on March 1, 2014, to
    yield an effective interest rate of 9.8 percent. Prepare the journal entries for March 1, 2014,
    August 31, 2014, and February 28, 2015.3. Explain the role that market interest rates play in
    causing a premium in requirement 1 and a discount in requirement 2.View Solution:
    Krabna Corporation has 8 000 000 of 9 5 percent 25 year bonds dated
    SOLUTION-- http://solutiondone.online/downloads/krabna-corporation-
    has-8-000-000-of-9-5-percent-25-year-bonds-dated/

    Unlock answers here solutiondone.online


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