On January 1, 2015, smithton company issues $46 million of 8% bonds, due in 7 years, with interest payable semi annually on June 30 and December 31 each year required.
1. If the market rate is 10%, will the bonds issue at face amount, a discount or a premium?Justify your answer.
2. Calculate the issue price of the bonds
3. Prepare the journal entry for the issuance of the bonds. Indicate debits with DR and credits with CR