Home / Questions / On January 1 2015 Water Wonderland issues $20 million of 8% bonds due in ten years
On January 1, 2015, Water Wonderland issues $20 million of 8% bonds, due in ten years, with interest payable semiannually on June 30 and December 31 each year.
1. If the market rate is 7%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.
2. If the market rate is 8%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.
3. If the market rate is 9%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.
139. Pizza Pier issues 7%, 10-year bonds with a face amount of $80,000 on January 1, 2015. The market interest rate for bonds of similar risk and maturity is also 7%. Interest is paid semiannually on June 30 and December 31.
1. Record the bond issue.
2. Record the first interest payment on June 30, 2015.
Jan 27 2020 View more View Less
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