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  3. on february 1 2016 cromley motor products issued 6 bonds...

Question: on february 1 2016 cromley motor products issued 6 bonds...

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On February 1, 2016, Cromley Motor Products issued 6% bonds, dated February 1, with a face amount of $85 million. The bonds mature on January 31, 2020 (4 years). The market yield for bonds of similar risk and maturity was 8%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $85,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31.

Required: 1. Determine the price of the bonds issued on February 1, 2016. (Enter your answer in whole dollars.) Price of the bonds

2.1 Prepare amortization schedules that indicate Cromleys effective interest expense for each interest period during the term to maturity. (Enter your answers in whole dollars.) Payment Number Outstanding Balance Cash Payment Effective InterestIncrease in Balance 4 6 Totals

2.2 Prepare amortization schedules that indicate Barnwells effective interest revenue for each interest period during the term to maturity. (Enter your answers in whole dollars.) 9 6 Payment Cash Effective Interest Increase in Outstanding Number Payment 8 Balance Balance Totals

on February 1, 2016. (If no entry is required for a transactionlevent, selectNo journal entry required in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 2 Record the issuance of the bonds by Cromley. Note: Enter debits before credits. Date General Journal Debit Credit February 01, 2016 Record entry Clear entry View general journal

3. Prepare the journal entries to record the issuance of the bonds by Cromley and Barnwells investment on February 1, 2016. (If no entry is required for a transaction/event, select No journal entry required in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 2 Record the Bond investment by Barnwell Note: Enter debits before credits. Date General Journal Debit Credit February 01, 2016 Record entry Clear entry View general journal

Prepare the journal entries by both firms to record all subsequent events related to the bonds through January 31, 2018. (If no entry is required for a transaction/event, select No journal entry required in the first account field. Enter your answers in whole dollars.) 4. Cromley Motor Products View transaction list Journal entry worksheet 4 6 Record the interest expense of Cromley company Note: Enter debits before credits. Date General Journal Debit Credit July 31, 2016 Record entry Clear entry View general journal

Below is the list of 6 journal entries for the above info.

View transaction list Record the interest expense of Cromley company. Record the interest expense of Cromley company Record the interest expense of Cromley company. Record the interest expense of Cromley company. Record the interest expense of Cromley company. Record the interest expense of Cromley company. 1 2 3 4 s Credit 6 Note:journal entry has been entered Record entry Clear entry View general journal

View transaction list Journal entry worksheet 4 Record cash received of Barnwell company. Note: Enter debits before credits. Date General Journal Debit Credit July 31, 2016 Record entry Clear entry View general journal

Below is the list of 6 journal entries for the above info.

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