Chapter 14, Problem 3E

To determine

Introduction:

Bonds: A bond is defined as a security generally used for a debt investment under which an investor finances money to an entity for a definite period of time at a fixed interest rate. Ventures that demand huge amount of funds are usually financed from bond issuance. The total amount of interest payable on bond issuance during a given period of time is known as bond interest expense.

To calculate:

1. The amount of each semi-annual interest payment for these bonds.

2. The number of semi- annual interest payments that will be made on these bonds over their life.

3. Whether the bonds are issued at par, at a discount, or at a premium.

4. The price of the bonds of their issue date.

5. The journal entry to record the bond’s issuance