Citywide Company issues bonds with a par value of $69,000 on their stated issue date. The bonds mature in seven years and pay 9% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)
| 1. |
What is the amount of each semiannual interest payment for these bonds?
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| 2. |
How many semiannual interest payments will be made on these bonds over their life?
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| 3. |
Use the interest rates given to select whether the bonds are issued at par, at a discount, or at a premium.
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At a premium |
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At par |
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At a discount |
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| 4. |
Compute the price of the bonds as of their issue date. (Round intermediate calculations to the nearest dollar amount.)
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| 5. |
Prepare the journal entry to record the bonds' issuance. (Round intermediate calculations to the nearest dollar amount.)
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