Business, 18.01.2021 14:00 Mtross30

Universal Foods issued 12% bonds, dated January 1, with a face amount of $175 million on January 1, 2018. The bonds mature on December 31, 2032 (15 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. Required:
a. Determine the price of the bonds at January 1, 2018.
b. Prepare the journal entry to record their issuance by Universal Foods on January 1, 2018, interest on June 30, 2018 and interest on December 31, 2025.

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Universal Foods issued 12% bonds, dated January 1, with a face amount of $175 million on January 1,...

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