Hartford Research issues bonds dated January 1, 2016, that pay interest semiannually on June 30 and December 31. The bonds have a $22,000 par value and an annual contract rate of 12%, and they mature in 10 years. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)

Required:

Consider each of the following three separate situations.

1. The market rate at the date of issuance is 10%.

(a) Complete the below table to determine the bonds' issue price on January 1, 2016.

Table values are based on:
n =
i =
Cash Flow	Table Value	Amount	Present Value
Par (maturity) value
Interest (annuity)
Price of bonds

(b) Prepare the journal entry to record their issuance.

• Record the issue of bonds with a par value of $22,000 cash on January 1, 2016. Assume that the market rate of interest at the date of issue is 10%.

• 2. The market rate at the date of issuance is 12%.

  (a) Complete the below table to determine the bonds' issue price on January 1, 2016.

• Table values are based on:
  n =
  i =
  Cash Flow	Table Value	Amount	Present Value
  Par (maturity) value
  Interest (annuity)
  Price of bonds

• (b) Prepare the journal entry to record their issuance.

• Journal entry worksheet

• Record the issue of bonds with a par value of $22,000 cash on January 1, 2016. Assume that the market rate of interest at the date of issue is 12%.

3. The market rate at the date of issuance is 14%.

(a) Complete the below table to determine the bonds' issue price on January 1, 2016.

Table values are based on:
n =
i =
Cash Flow	Table Value	Amount	Present Value
Par (maturity) value
Interest (annuity)
Price of bonds

• Record the issue of bonds with a par value of $22,000 cash on January 1, 2016. Assume that the market rate of interest at the date of issue is 14%.