Chapter 10, Problem 5QS

a

To determine

Concept Introduction:

Bond financing: A bond is a written promise to pay an amount equal to the face value of the bond along with the interest promised. A bond requires payment of periodic interest payments, interest payment is computed by the multiplication of par value with the bond contract rate.

The journal entry assuming bonds are issued at 99 and $103\raisebox{1ex}{$1$}\!\left/ \!\raisebox{-1ex}{$2$}\right.$

b

To determine

Concept Introduction:

Bond financing: A bond is a written promise to pay an amount equal to the face value of the bond along with the interest promised. A bond requires payment of periodic interest payments, interest payment is computed by the multiplication of par value with the bond contract rate.

The interest is payable semi-annually when bonds are paid at par value.