Bonds issue at face amount-discount or a premium

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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

Reference no: EM13788832

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