PROBLEM B$.4$ Present Value and Bond Prices LOB$-3,\backslash (\backslash$sqrt$\{\}\backslash )$ LOB$-5,\backslash (\backslash$sqrt$\{\}\backslash )$ LOB$-6$ On June $30$ of the current year, Blue Ridge Power issued bonds with a $\backslash (\backslash$$ $10,000,000\backslash )$ face value and an annual coupon rate of $9$ percent. The bonds mature in $10$ years and pay semiannual interest on December $31$ and June $30.$ They were issued when the annual market interest rate for bonds of similar type and risk was $10$ percent. Instructions a$.$ Compute the issue price for the bond that results in an effective annual interest rate of $10$ percent. $($Hint: Discount both the interest payments and the maturity value over $20$ semiannual periods at $5$ percent.$)$ b$.$ Prepare a journal entry to record the issuance of the bonds at the sales price you computed in part a$.$ c$.$ Explain why the bonds were issued at a discount.