ACC – Storall Company and Ecological Water Filtration, Inc.
1) Storall Firm issued USD 200,000 face worth of 16 p.c, 20- 12 months junk bonds on 2010 July 1. The bonds are dated 2010 July 1, name for semiannual curiosity funds on July 1 and January 1, and have been issued to yield 12 p.c (6 p.c per interval).a. Compute the quantity obtained for the bonds.b. Put together an amortization schedule just like that in Exhibit 45. Enter information within the schedule for under the primary two curiosity durations. Use the curiosity technique.c. Put together journal entries to file issuance of the bonds, the primary six months' curiosity expense on the bonds, and the adjustment wanted on 2011 Could 31, assuming the corporate's fiscal 12 months ends on that date.2) Ecological Water Filtration, Inc., goes to subject USD 400,000 face worth of 10 p.c, 15-year bonds. The bonds are dated 2009 June 30, name for semiannual curiosity funds, and mature on 2024 June 30.a. Compute the value buyers ought to provide in the event that they search a yield of eight p.c on these bonds. Additionally, compute the primary six months' curiosity, assuming the bonds are issued at this worth. Use the curiosity technique and calculate all quantities to the closest greenback.b. Repeat half (a), assuming buyers search a yield of 12 p.c.