Problem #3: Assume that on January 1, 2019, Sand World issues $200,000 of 9% bonds, due in 10 years with interest payable semiannually on June 30 and December 31 each year. Required: a. If the market rate is 9%, the bonds will issue at $200,000. Record the bond issue on January 1, 2019. b. If the market rate is 10%, the bonds will issue at $187,538. Record the bond issue on January 1, 2019. c. If the market rate is 8%, the bonds will issue at $213,590. Record the bond issue on January 1, 2019.
Problem #3: Assume that on January 1, 2019, Sand World issues $200,000 of 9% bonds, due in 10 years with interest payable semiannually on June 30 and December 31 each year. Required: a. If the market rate is 9%, the bonds will issue at $200,000. Record the bond issue on January 1, 2019. b. If the market rate is 10%, the bonds will issue at $187,538. Record the bond issue on January 1, 2019. c. If the market rate is 8%, the bonds will issue at $213,590. Record the bond issue on January 1, 2019.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem #3:
Assume that on January 1, 2019, Sand World issues $200,000 of 9% bonds, due in 10 years with interest
payable semiannually on June 30 and December 31 each year.
Required:
a. If the market rate is 9%, the bonds will issue at $200,000. Record the bond issue on January 1,
2019.
b. If the market rate is 10%, the bonds will issue at $187,538. Record the bond issue on January 1,
2019.
c. If the market rate is 8%, the bonds will issue at $213,590. Record the bond issue on January 1,
2019.
Account
Dr.
Cr.
a.
Account
Dr.
Cr.
b.
Calculation
Account
Dr.
Cr.
Calculation
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