Problem 14-1A Stowers Research issues bonds dated January 1, 2005, that pay interest semiannually on June30 and December 31.
Computing bond price and recording issuance
Stowers Research issues bonds dated January 1, 2005, that pay interest semiannually on June30 and December 31. The bonds have a $20,000 per value, an annual contract rate of 10%, and mature in 10 years.
Required
For each of the following three separate situations, (a) determine the bonds’ issue price on January
1. 2005 and (b) prepare the journal entry to record their issuance.
1. Market rate at the date of issuance is 8%
2. Market rate at the date of issuance s 10%.
3. Market rate at the date of issuance is 12%
CLICK HERE FOR THE SOLUTION