Stowers Research issues bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds have a $40,000 par value and an annual contract rate of 10%, and they mature in 10 years.

Date	General Journal	Debit	Credit
Jan. 1	(Click to select)Bond interest expensesBond interest payableAccounts receivableBonds payableDiscount on bonds payablePremium on bonds payableCashAccounts payable
	(Click to select)Premium on bonds payableAccounts payableBonds payableAccounts receivableBond interest expensesCashBond interest payableDiscount on bonds payable
	(Click to select)Accounts payableAccounts receivableCashBond interest payablePremium on bonds payableDiscount on bonds payableBonds payableBond interest expense
Tables/Images: http://imgur.com/a/0FJqX

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 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)Accounts receivablePremium on bonds payableBond interest payableBond interest expenseDiscount on bonds payableAccounts payableBonds payableCash
	(Click to select)Accounts payablePremium on bonds payableCashDiscount on bonds payableBonds payableBond interest payableAccounts receivableBond interest expense
	(Click to select)Accounts payableBond interest payableCashBonds payableDiscount on bonds payableAccounts receivablePremium on bonds payableBond interest expense

2.	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)Premium on bonds payableCashBonds payableBond interest payableDiscount on bonds payableAccounts payableAccounts receivableBond interest expense
	(Click to select)CashBond interest expenseDiscount on bonds payableBonds payableBond interest payableAccounts receivableAccounts payablePremium on bonds payable

3.	The market rate at the date of issuance is 12%.

(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 expensesBond interest payableAccounts receivableBonds payableDiscount on bonds payablePremium on bonds payableCashAccounts payable
	(Click to select)Premium on bonds payableAccounts payableBonds payableAccounts receivableBond interest expensesCashBond interest payableDiscount on bonds payable
	(Click to select)Accounts payableAccounts receivableCashBond interest payablePremium on bonds payableDiscount on bonds payableBonds payableBond interest expense
Tables/Images: http://imgur.com/a/0FJqX