Question

Determine whether the following bonds payable will be issued at par, at a premium, or at a discount:
a. The market interest rate is 7%. Owens, Corp. Issues bonds payable with a stated rate of 8 1/2%.
b. Bakers, Inc. issued 7% bonds payable when the market rate was 7 1/2%.
c. Saratoga Corporation issued 8% bonds when the market interest rate was 8%.
d. Tacoma Company issued bonds payable that pay cash interest at the stated rate of 7%. At the date of issuance, the market interest rate was 8 1/4%.


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  • CreatedJuly 08, 2015
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