Sky King 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 prize of the bonds.
B. Prepare an amortization schedule for the bonds.
C. Using a format, 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 sold?