Goth Inc. issued a group of bonds on January 1, 2014, that pay interest semi-annually on June

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Goth Inc. issued a group of bonds on January 1, 2014, that pay interest semi-annually on June 30 and December 31. The par value of the bonds is $100,000, the annual contract rate is 10%, and the bonds mature in 10 years.


Required

For each of these three situations,

(a) Determine the issue price of the bonds, and

(b) Show the journal entry that would record the issuance, assuming the market interest rate at the date of issuance was:

1. 8%

2. 10%

3. 12%

Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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Related Book For  book-img-for-question

Fundamental Accounting Principles Volume II

ISBN: 978-1259066511

14th Canadian Edition

Authors: Larson Kermit, Jensen Tilly

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