Quest on 11 (of 12) The Bradford Company issued 8% bonds, dated January 1, with

Question

Quest on 11 (of 12) The Bradford Company issued 8% bonds, dated January 1, with a face amount of S75 million on January 1, 2013 to Saxton-Bose Corporation. The bonds mature on December 31, 2032 (20 years). For bonds of Similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor (s) from the tables provided.) Required: 1. Prepare the jounal entry to record the purchase of the bonds by Saxton-Bose on January 1, 2013 (Enter your answers in whole dollars. If no entry is required for a transaction, select "No journal entry required" in the first account field.) view transaction list view general journal Journal Entry Worksheet Record the purchase of the bonds by Saxton-Bose. Date General Journal DebitCredit 75,000,000 January 01. 2013 Bond investment Discount on bond investment 12,868,980 Cash 62.131,020 "Enter debits before credits

Explanation / Answer

From the Present Value calculation, I am getting purchase price $62,127,000. I think through scientific calculator we get the purchase value of the bond entered by you.

All the journal entries are correct alongwith the amortization of the discount entry.

You got the things right.

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