Question - On 1-1 Your company sells a $3,000 face value bond, stated interest rate of 8%, Market interest rate of 12%, Life of 10 years, semiannual. The first interest payment is made 6/30. Answer the following:
1. Will this bond sell for a discount or a premium _____________________
2. How many time periods will this bond pay interest payments for _________________
3. What interest rate will you use for the "I"
a. 8%
b. 12%
c. 4%
d. 6%
4. What is the present worth of the maturity value (face value)________
5. What is the present worth of the interest payments ______________
6. What is the present worth of the bond (what amount should it sell for) ________________
7. How much is the discount or premium _________________
8. What is the journal entry to record the bond sale on 1-1
9. What is the journal entry to record the first bond interest payment on 06/30.