Mayfield Manufacturing sells $500,000 of 4% bonds on January 1, 2012. The bonds
ID: 2451030 • Letter: M
Question
Mayfield Manufacturing sells $500,000 of 4% bonds on January 1, 2012. The bonds are unsecured but registered to the name of the purchaser. The bonds are due in 5 years, with interest payable annually at year-end.
Determine the value of the bonds if they are sold on the market at 102.8. Show the T-Accounts at the date of issuance, each subsequent year, and at the date of maturity.
Discounted/
Premium
Cash Pmt to Discount/Premium Carrying
Date Bondholders Interest Exp Amortization Amount Value
Determine the value of the bonds if they are sold on the market at 96.4. Show the T-Accounts at the date of issuance, each subsequent year, and at the date of maturity.
Discounted/
Premium
Cash Pmt to Discount/Premium Carrying
Date Bondholders Interest Exp Amortization Amount Value
Explanation / Answer
Mayfield Manufacturing sells $500,000 of 4% bonds on January 1, 2012. The bonds