Bond Valuation

valuation.xlsx

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Calculation
	Available information
	Coupon Rate	6.00%
	Interest payable	semiannual
	Yield to Maturity	8.00%
	Maturity period	8
	Face Value	$5,000,000.00
	Proceeds from bond issue =	(Semiannual Intt)(PVIFAR%,16) + (Maturity sum)(PVIFR%,16)
	So, Proceeds from bond issue =	$4,417,385.22
Answers to Questions
1	Determine the bond proceeds on January 1 2014	$4,417,385.22
2	Was the bond issued at a premium or discount or at par value?	Discount
3	If applicable, what was the amount of the premium or discount?	$582,614.78	Discount
4	Prepare the Journal Entry, in proper form, to reflect the issuance of the bond on January 1 2014.
		DATE	DESCRIPTION	DEBIT	CREDIT
		1/1/14	Cash A/c	$4,417,385.22
			Discount on Bonds Payable	$582,614.78
			Bonds Payable		$5,000,000.00