Stowers Research issues bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds have a $34,000 par value and an annual contract rate of 8%, and they mature in 10 years.

Required:

Consider each of the following three separate situations. (Use Table B.1, Table B.3)

1.	The market rate at the date of issuance is 6%.

(a)	Determine the bonds' issue price on January 1, 2011. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answer to the nearest dollar amount. Omit the "$" sign in your response.)

Issue price

$

(b)	Prepare the journal entry to record their issuance. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Date	General Journal	Debit	Credit
Jan. 1	(Click to select) Premium on bonds payable Accounts receivable Cash Discount on bonds payable Bond interest payable Bond interest expense Bonds payable Accounts payable
	(Click to select) Accounts receivable Premium on bonds payable Accounts payable Bonds payable Bond interest payable Discount on bonds payable Cash Bond interest expense
	(Click to select) Discount on bonds payable Premium on bonds payable Accounts payable Bond interest payable Accounts receivable Cash Bonds payable Bond interest expense

2.	The market rate at the date of issuance is 8%.

(a)	Determine the bonds' issue price on January 1, 2011. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answer to the nearest dollar amount. Omit the "$" sign in your response.)

Issue price

$

(b)	Prepare the journal entry to record their issuance. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Date	General Journal	Debit	Credit
Jan. 1	(Click to select) Bond interest expense Premium on bonds payable Bonds payable Discount on bonds payable Bond interest payable Accounts receivable Accounts payable Cash
	(Click to select) Premium on bonds payable Accounts receivable Discount on bonds payable Bond interest payable Accounts payable Cash Bond interest expense Bonds payable

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

(a)	Determine the bonds' issue price on January 1, 2011. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answer to the nearest dollar amount. Omit the "$" sign in your response.)

Issue price

$

(b)	Prepare the journal entry to record their issuance. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Date	General Journal	Debit	Credit
Jan. 1	(Click to select) Bonds payable Cash Discount on bonds payable Premium on bonds payable Accounts receivable Accounts payable Bond interest payable Bond interest expenses
	(Click to select) Bonds payable Cash Premium on bonds payable Accounts payable Discount on bonds payable Bond interest expenses Accounts receivable Bond interest payable
	(Click to select) Bonds payable Bond interest expense Accounts receivable Cash Accounts payable Premium on bonds payable Discount on bonds payable Bond interest payable