Using the information from BE14- 11, determine the issue price of the bonds, assuming that the market

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Using the information from BE14- 11, determine the issue price of the bonds, assuming that the market rate of interest is 6%, and prepare the journal entry to record the bond issue using a premium or discount account if needed.
In BE14- 11
On January 1, Plum Company issued $ 800,000 par value, 8%, 5- year bonds ( i. e., there were 800 $ 1,000 par value bonds in the issue). Interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the period on July 1. Plum paid $ 9,000 in underwriting fees. Determine the issue price of the bonds with a 12% market rate of interest and prepare the journal entry to record the bond issue using a premium or discount account if needed. 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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Intermediate Accounting

ISBN: 978-0132162302

1st edition

Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

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