Response to the following questions:
1. A rental agency collects rent in advance. Why is the rent collected treated as a liability?
2. A bond carries a stated rate of interest of 6% and par of $1,000. It matures in 20 years. It is sold at 83 (83% of $1,000, or $830).
a. Under normal conditions, why would the bond sell at less than par?
b. How would the discount be disclosed on the statements?
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