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 Garcia Company issues 10%, 15-year bonds with a par value of $240,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8%, which implies a selling price of 1171⁄4. Prepare the journal entry for the issuance of these bonds. Assume the bonds are issued for cash on January 1, 2015.