Response to the following :
For each bond in Problem , journalize issuance of the bond and the first semiannual interest payment. The company amortizes bond premium and discount by the straight-line method. Explanations are not required.
Problem :
Determine the present value of the following notes and bonds:
a. Ten-year bonds payable with maturity value of $88,000 and stated interest rate of 12%, paid semiannually. The market rate of interest is 12% at issuance.
b. Same bonds payable as in a, but the market interest rate is 14%.
c. Same bonds payable as in a, but the market interest rate is 10%.