Note:Answer problems regarding present value calculations and the effective interest method of amortization only if the appendices were studied in your course. Recall as well that "issuing a $100,000 bond at 105", for example, means that the bond is sold for $100,000 x 105% = $105,000.

CP 10-1

Required:Complete the following by responding eitherpremiumordiscount.

1. If the market rate of interest is 15% and the bond interest rate is 10%, the bonds will sell at a ______________.
2. If a bond's interest rate is 10% and the market rate of interest is 8%, the bonds will sell at a ______________.
3. In computing the carrying amount of a bond, unamortized ______________ is subtracted from the face value of the bond.
4. In computing the carrying amount of a bond, unamortized ______________ is added to the face value of the bond.
5. If a bond sells at a ______________, an amount in excess of the face value of the bond is received on the date of issuance.
6. If a bond sells at a ______________, an amount less than the face value of the bond is received on the date of issuance.