On January 1 X Co. issues a bond with a face value of $45,000,000. The bond has a 4 year life and pays interest annually at a stated rate of 5% on December 31. At the time the bond was issued the market rate of interest is 7% REQUIRED A - Calculate the issue price of the bond and provide the journal entry required to record the bond issuance. All work must be shown to receive credit.: Issue Price: REQUIRED B- Provide the Journal Entry to Record the Bond Issuance Journal Entry: Account DR CR REQUIRED C - Using the Effective Interest Method calculate interest expense etc for each year of that the bond pays interest to its bondholders. All work must be shown to receive credit. Be neat and properly label all items or else you will not receive full credit REQUIRED D: PROVIDE THE REQUIRED JOURNAL ENTRIES FOR THE YEAR 1-4 INTEREST PAYMENTS. YEAR 1: December 31, X1 Account DR CR YEAR 2: December 31, X2 Account DR CR YEAR 3: December 31, X3 Account DR CR YEAR 4: December 31, X4 Account DR CR REQUIRED E: ASSUME NOW THAT THE COMPANY REDEEMS THE BOND AT THE END OF YEAR 2 BY PAYING THE BONDHOLDERS $50,000,000. CALCULATE THE GAIN OR LOSS ON BOND REDEMPTION. SHOW ALL WORK. A. PROVIDE THE JOURNAL ENTRY TO RETIRE THE BOND.
