On January 1, 2009, Cool Universe Issued 10% Bonds Dated

question 116

Essay

On January 1, 2009, Cool Universe issued 10% bonds dated January 1, 2009, with a face amount of $20 million. The bonds mature in 2018 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31.
Required:
1. Determine the price of the bonds at January 1, 2009.
2. Prepare the journal entry to record their issuance by Cool on January 1, 2009.
3. Prepare the journal entry to record interest on June 30, 2009, using the straight-line method.
4. Prepare the journal entry to record interest on December 31, 2009, using the straight-line method.

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Definitions:

Phobias

Excessive and irrational fears of specific objects, situations, or activities that lead to avoidance behavior.

Anxiety Disorders

Mental health conditions characterized by significant fear or anxiety that impairs one's ability to function in daily life.

Serotonin

A neurotransmitter involved in many functions including mood regulation, digestion, and sleep.

Anxiety Disorders

A group of mental health disorders characterized by significant feelings of anxiety and fear, impacting an individual's ability to function daily.