Problem#2. On January 31 2013, Louis Company issued bonds. Bonds data: Maturity (par value):...
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Problem#2. On January 31 2013, Louis Company issued bonds. Bonds data: Maturity (par value): $100,000. Bond term: 2-years. Stated interest rate: 12% annually Market interest rate: 8% annually Interest is paid every quarter: on April 31, July 31t , October 31, and January 31st of each year. Required: Calculate the bond selling price 1) Bond selling price = _____________________________ 2) Prepare journal entry on January 31, 2013 3) Is this a bond with premium or discount? Explain why.
Problem#2. On January 31 2013, Louis Company issued bonds.
Bonds data:
Maturity (par value): $100,000.
Bond term: 2-years.
Stated interest rate: 12% annually
Market interest rate: 8% annually
Interest is paid every quarter: on April 31, July 31t , October 31, and January 31st of each year.
Required: Calculate the bond selling price
1) Bond selling price = _____________________________
2) Prepare journal entry on January 31, 2013
3) Is this a bond with premium or discount? Explain why.
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