Explain why the bonds were issued at a discount


On June 30 of the current year, Rural Gas & Electric Co. issued $50,000,000 face value, 9 percent, 10-year bonds payable, with interest dates of December 31 and June 30. The bonds were issued at a discount, resulting in an effective semiannual interest rate of 5 percent

a compute the issue price for the ond that results in an effective semiaannual interest rate of 5%

b. prepare a journal entry to record the issuance of the bonds at the sales price you computed in part a

c. explain why the bonds were issued at a discount?

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Explain why the bonds were issued at a discount
Reference No:- TGS0691612

Expected delivery within 24 Hours