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Problem 14-1A Computing bond price and recording issuance L. P1, P2, P3 Stowers Research issues bonds dated January 1, 2011, that pay interest...

Problem 14-1A Computing bond price and recording issuance L.O. P1, P2, P3
Stowers Research issues bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds have a $30,000 par value and an annual contract rate of 10%, and they mature in 10 years.

Required: Consider each of the following three separate situations. (Use Table B.1, Table B.3)


1. The market rate at the date of issuance is 8%.

(a) Determine the bonds' issue price on January 1, 2011. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answer to the nearest dollar amount. Omit the "$" sign in your response.)


Issue price $ _____


(b) Prepare the journal entry to record their issuance. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Date General Journal Debit Credit
Jan. 1, 2011


2. The market rate at the date of issuance is 10%.

(a) Determine the bonds' issue price on January 1, 2011. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answer to the nearest dollar amount. Omit the "$" sign in your response.)

Issue price $ _______


(b) Prepare the journal entry to record their issuance. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)


Date General Journal Debit Credit
Jan. 1


3. The market rate at the date of issuance is 12%.


(a) Determine the bonds' issue price on January 1, 2011. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answer to the nearest dollar amount. Omit the "$" sign in your response.)

Issue price $ ________


(b) Prepare the journal entry to record their issuance. (Round "PV Factors" to 4 decimal places, intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Date General Journal Debit Credit
Jan. 1



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Problem 14­1A Computing bond price and recording issuance L.O. P1, P2, P3
Stowers Research issues bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds...

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