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Prepare the journal entry that would record the issuance

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Question - Queen Energy Inc. issued bonds on January 1, 2020, that pay interest semiannually on June 30 and December 31. The par value of the bonds is $290,000, the annual contract rate is 6%, and the bonds mature in 10 years. (Use TABLE 14A.1 and TABLE 14A.2.) (Use appropriate factor(s) from the tables provided.)

Required -

a. For each of these three situations, determine the issue price of the bonds.

1. Market Rate Interest is 4%

2. Market Rate Interest is 6%

3. Market Rate Interest is 8%

b. For each of these three situations, prepare the journal entry that would record the issuance, assuming the market interest rate at the date of issuance was (1) 4%, (2) 6%, (3) 8%.

Reference no: EM133076977

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