(Answered) Question - on 1-1 your company sells a 3000 face value bond

Accounting

Question - On 1-1 Your company sells a $3,000 face value bond, stated interest rate of 8%, Market interest rate of 12%, Life of 10 years, semiannual. The first interest payment is made 6/30. Answer the following:

1. Will this bond sell for a discount or a premium _____________________

2. How many time periods will this bond pay interest payments for _________________

3. What interest rate will you use for the "I"

a. 8%

b. 12%

c. 4%

d. 6%

4. What is the present worth of the maturity value (face value)________

5. What is the present worth of the interest payments ______________

6. What is the present worth of the bond (what amount should it sell for) ________________

7. How much is the discount or premium _________________

8. What is the journal entry to record the bond sale on 1-1

9. What is the journal entry to record the first bond interest payment on 06/30.

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