Problem - Round dollar amount to the nearest whole dollar, Assume no reversing entries are used.
Sedona Systems issues bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds have a $45,000 par value and an annual contract rate of 12%, and they mature in five years.
Required - For each of the following three seperate situations, (a) determine the bonds' issue price on January 1, 2011, and (b) prepare the journal entry to record their issuance.
1. The market rate at the date of issuance is 10%
2. The market rate at the date of issuance is 12%
3. The market rate at the date of issuance is 14%