Question: In-class exercise 14-1: Bond Issue at discount and Bond Issue at premium A. Ajax Corporation issues 500 $1,000 bonds on June 1, 2011 with maturity

In-class exercise 14-1: Bond Issue at discount and Bond Issue at

In-class exercise 14-1: Bond Issue at discount and Bond Issue at premium A. Ajax Corporation issues 500 $1,000 bonds on June 1, 2011 with maturity on May 31, 2016. The bonds have a stated interest rate of 4%, payable semi-annually on November 30th and May 31st (2% each payment). The market rate for the bonds is 5% (2.5% per period). 1. Calculate issuance price for the bonds; 2. Prepare journal entry for the bond issue on June 1, 2011

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