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# Calculate the issue price of a \$1,500,000 bond issue and preparing the journal entries of the issuance and first years interest payments using the effective interest method. The bonds are paid semiannually on Jun 30 and December 31.

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Calculate the issue price of a \$1,500,000 bond issue and preparing the journal entries of the issuance and first years interest payments using the effective interest method. The bonds are paid semiannually on Jun 30 and December 31.

The first is a 12 year, 8 percent bond issue with a market interest rate of 12 percent.

The second is a 12 year, 8 percent bond issue with a market interest rate of 6 percent.

#### Solution Preview

The first is a 12 year, 8 percent bond issue with a market interest rate of 12 percent.

The issue price is actually the present value of the bond, and the future value is the par value.
In a financial calculator ...

#### Solution Summary

Calculations are shown by hand.

\$2.19