Question

On January 1, 2015, Water Mania issues $1,000,000 of 6% bonds, due in ten years, with interest payable semi-annually on June 30 and December 31 each year.

Required:
1. If the market interest rate is 6%, the bonds will issue at $1,000,000. Record the bond issue on January 1, 2015, and the first two semi-annual interest payments on June 30, 2015, and December 31, 2015.
2. If the market interest rate is 7%, the bonds will issue at $928,938. Record the bond issue on January 1, 2015, and the first two semi-annual interest payments on June 30, 2015, and December 31, 2015.
3. If the market interest rate is 5% the bonds will issue at $1,077,946. Record the bond issue on January 1, 2015, and the first two semi-annual interest payments on June 30, 2015, and December 31, 2015.



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  • CreatedJuly 15, 2014
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