Flagstaff Systems issues bonds dated January 1, 2017, that pay interest semiannually on June 30 and December

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Flagstaff Systems issues bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds have a $90,000 par value and an annual contract rate of 12%, and they mature in five years.
Required
For each of the following three separate situations, (a) determine the bonds' issue price on January 1, 2017, and (b) prepare the journal entry to record their issuance.
1. The market rate at the date of issuance is 10%.
2. The market rate at the date of issuance is 12%.
3. The market rate at the date of issuance is 14%.
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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Fundamental Accounting Principles

ISBN: 978-1259536359

23rd edition

Authors: John Wild, Ken Shaw, Barbara Chiappett

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