Question: Please explain all the steps of the solution thoroughly. Bond contract rate = 7% semi-annual Bond par = $10,000 Bond market rate = 6% semi-annual

Please explain all the steps of the solution thoroughly.

Bond contract rate = 7% semi-annual

Bond par = $10,000

Bond market rate = 6% semi-annual

Bond life = 10 years

  1. Find the selling price of this bond
  2. Will it be sold at a discount or premium?
  3. Do the journal entry for the issuance
  4. Calculate the discount/premium amortization per period (use the straight-line method)
  5. Do the entry for the payment of cash interest per period
  6. Do the entry for the amortization of the discount/premium per period
  7. Find total interest expense per period
  8. Show the balance sheet presentation of the bond after two periods have elapsed

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