Question: RST Company sold $9 million of four-year, 8% debentures on July 1, 2007. The bonds sold to yield a real rate of 7%. Interest is paid annually on June 30.
A. Determine the price of the bonds.
B. Prepare an amoritization schedule for the bonds.
C. Record the entry to the accounting system that is necessary to recognize interest on the bonds at June 30, 2008.
D. Assume the bonds had been sold to yield a real rate of 9%. At what price would they have been sold?