problem: Zombie Industries issues $400,000 face value, 8.5 percent coupon, fifteen year bonds on January 1, 2008. Interest is paid yearly on December 31.

Make journal entry to record interest expense and the interest payment on these bonds on December 31, 2008, using the effective interest rate method if the market rate of interest on January 1, 2008 is 10 percent?

[A] What is the book value of these bonds on January 1, 2009 under the effective interest rate method if the market rate of interest on January 1, 2008 is 10 percent?

[B] What is the market value of these bonds on January 1, 2009 if the market rate of interest on January 1, 2008 is 10 percent and the market rate of interest on January 1, 2009 has increased to 12 percent?

[C] Find the total interest expense recorded on these bonds over the fifteen years if the market rate of interest on January 1, 2008 is 10 percent?

[D] At what price [where par = 100 percent] would these bonds be issued, if the market rate of interest on January 1, 2008 is 10 percent?

[E] Prepare the journal entry to record the sale of the bonds on January 1, 2008 if the market rate of interest on January 1, 2008 is ten percent?

[F] At what price [where par = 100 percent] would these bonds have been issued, if the market rate of interest on January 1, 2008 had been 7 percent rather than 10 percent?