(Answered) Question - sbb company issued 10 5 year 600000 face value

Accounting

Question - SBB Company issued 10%, 5 year, $600,000 face value bonds that pay interest semi-annually. The bonds are dated on April 1 2014 and are issued on that date. The effective market rate of interest on 4/1/2014 is 12%.

1. Compute the selling price of the bond. (Show work)

2. Indicate if the bonds sold at a premium or discount?

3. Explain why the bonds were issued at a premium or discount?

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