Hartford Research issues bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31 The bonds have a $40,000 par value and an annual contract rate of 10 , and they mature in 10 years Required For each of the following three separate situations, (a) determine the bonds ' ...

Part 1 a Cash Flow Table Table Value Amount Present Value Par value B1 04564 40000 18256 Interest an ...

Hartford Research issues bonds dated January 1, 2017, that pay interest semiannually on June 30 and December

Question:

Hartford Research issues bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds have a $40,000 and an annual contract rate of 10%, and they mature in 10 years.
Required
For each of the following three separate situations, (a) determine the bonds' issue price on January 1, 2017, and (b) prepare the journal entry to record their issuance.
1. The market rate at the date of issuance is 8%.
2. The market rate at the date of issuance is 10%.
3. The market rate at the date of issuance is 12%.
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...