Assignment Instructions/ Description
LONG TERM LIABILITIES���Golden Arches wants to expand their business and venture into the fast food industry. Golden Arches plans to raise the capital by issuing $500,000 of 5.5%, seven-year bonds on January 1, 2019. The bonds pay interest semiannually on June 30 and December 31. The company receives $501,008 when the bonds are issued.������Record the following transactions. Include dates and round to the nearest dollar. Omit explanations.���a.Cash received from the bond issue.���b.Semiannual bond interest payments for 2019. Amortize the premium or discount using the straight-line amortization method.���c.Retirement of bond at maturity on December 31, 2026, assuming the last interest payment has already been recorded.����������JOURNAL ENTRIES�2019DateAccountsDRCR��a.�����������������������b.�����������������������b.������������� � �����������c.��������������PRESENT VALUE OF BOND PROCEEDS��������A corporation issues $1,500,000 of 3%, 5-year bonds, interest payable semiannually. At the time the bonds are issued, the market rate is 6%. Determine the present value of the bonds at issuance using the present value table below. Show computations in good form.���PV of Principal:���PV of annuity:���PV of Bond Payable =��������������������REMEMBER TO ADJUST THE RATE AND THE PERIOD!! Hint: multiple the period by 2 (semiannual payment) and divide the rate by 2 (semiannual payment)������������