Sierra Vaults Corporation produces and sells burial vaults. On July 1, 2010, Sierra Vaults Corporation issued $18,000,000

Question:

Sierra Vaults produces and sells burial vaults. On July 1, 2010, Sierra Vaults issued $18,000,000 of 10-year, 6% bonds at par. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Instructions
1. Illustrate the effects of the issuance of the bonds on July 1, 2010, on the accounts and financial statements.
2. Illustrate the effects of the first semiannual interest payment on December 31, 2010, on the accounts and financial statements.
3. Illustrate the effects of the payment of the of bonds at on the accounts and financial statements.
4. If the market rate of interest were 7% on July 1, 2010, would the bonds have sold at a discount or premium?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...