On june 30 of the current year rural gas amp electric co, Ask an Expert

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On June 30 of the current year, Rural Gas & Electric Co. issued $50,000,000 face value, 9 percent, 10-year bonds payable, with interest dates of December 31 and June 30. The bonds were issued at a discount, resulting in an effective semiannual interest rate of 5 percent.

a compute the issue price for the ond that results in an effective semiaannual interest rate of 5%

b. prepare a journal entry to record the issuance of the bonds at the sales price you computed in part a

c. explain why the bonds were issued at a discount

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9963394

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