The Standard Mills Corporation issues 1,000 bonds, each with a face value of $1,000, that mature in

Question:

The Standard Mills issues 1,000 bonds, each with a of $1,000, that mature in 12 years. The bonds carry a 6% interest rate and are sold to yield 4%. They pay interest semi-annually.
Required:
a. Calculate the issuance price of the bonds, and show the journal entry to record the issuance.
b. Explain why the issuance price of the bonds is not the same as their Will the carrying value of the liability for these bonds increase over time, or decrease? Explain briefly.
d. Show the journal entries to record the first two interest payments on these bonds. Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...