Question: Example #4, On January 1, 2016 a company issues 100 bonds, each for $1,000, for a discount, as the interest rate on the bond (stated/coupon

Example #4, On January 1, 2016 a company issues 100 bonds,

Example #4, On January 1, 2016 a company issues 100 bonds, each for $1,000, for a discount, as the interest rate on the bond (stated/coupon rate) is 3% and the market rate is 4%. They then used this cash to purchase an automobile for $100,000 cash. The bond is to be paid in at the end of THREE years (December 31, 2018). Calculate the cash received from issuing bond: Present value of maturity payment $100,000 3': Present value of interest payment ($100,000*.03=$3,000) L Present value of cash payments :5 a) PREPARE THE JOURNAL ENTRIES FOR 2016: Date Account Name Credit 1/1/2016

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