On May 1, 2014, a $300,000, ten-year, 14% bond was sold to yield 12% plus accrued interest. The bond was dated January 1, 2014, and interest is paid each January 1 and July 1. Present value data follow:

Required:
a. Compute the amount of cash received from the sale of the bond.
b. Prepare the journal entry to record the sale.
c. When preparing the journal entry, you recorded a premium or discount. Discuss why.

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PV of $1 PV of an Annuity 20 periods 0.311805 0.258419 0.103667 0.072762 20 periods 11.469921 10.594014 7.469444 6.623131 10 periods 0.558395 0.508349 0.321973 0.269744 10 periods 7.360087 7.023582 5.650223 5.216116 6% 7% 12% 14%