Stowers research issues bonds dated january 1 2011 that pay, Ask an Expert

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Stowers Research issues bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds have a $31,000 par value and an annual contract rate of 12%, and they mature in 10 years.

Required: Consider each of the following three separate situations.

1. The market rate at the date of issuance is 10%.

(a) Determine the bonds' issue price on January 1, 2011. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answer to the nearest dollar amount. Omit the "tiny_mce_markerquot; sign in your response.) Issue price $

(b) Prepare the journal entry to record their issuance. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answers to the nearest dollar amount. Omit the "tiny_mce_markerquot; sign in your response.) General Journal

2. The market rate at the date of issuance is 12%.

3. The market rate at the date of issuance is 14%.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9990357

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