(Answered) Question - garcia inc decided to issue bonds to raise

Accounting

Question - Garcia, Inc. decided to issue bonds to raise capital for a new acquisition.

On January 1, they issued bonds with a 15 year maturity and an interest rate of 6% paid annually. The face amount of each bond was $1,000. At the time of issuance the market rate of interest was 8%. Prepare journal entries to record the issuance of one of these bonds and to record the payment of interest for the first two years. What was the book value of the bond at the end of the second year? Ignore issuance costs.

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