Using the bond details in QS, confirm that the bonds’ selling price is approximately correct (within $100). Use the present value tables B.1 and B.3 in Appendix B.
In QS Enviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 871⁄2. Prepare the journal entries for the issuance of the bonds. Assume the bonds are issued for cash on January 1, 2015.