George's Inc. is considering issuing bonds to finance the acquisition of a nationwide chain of distributors of

Question:

George's Inc. is considering issuing bonds to finance the acquisition of a nationwide chain of distributors of George's products. George's is contemplating two different types of bonds to raise the required $180 million purchase price. The first is a traditional 10-year, 14% bond with semiannual interest payments. The second is a 10-year, zero bond.
Assuming the market rate of interest is 14%, compute the of the bond issuance and make the journal entries necessary to record the issuance if
(a) A traditional bond is issued and
(b) A zero-coupon bond is issued.
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...