1. Stargaze issued bonds X and Y. Both of these bonds have a face value of $100,000 and mature in 10 years. The interest rate of bond X is 8% and the interest rate of bond Y is 7%. The current market rate is 7%. Which of the following is correct?

a. Both bonds will sell for the same amount. b. Both bonds will sell at a premium. c. Bond Y will sell for more than Bond X. d. Bond X will sell for more than Bond Y.

2. Stargaze issued a 5 year bond of $600,000. The interest rate for $580,000 is 5%. What effect the bond issuing on the accounting equation.

a. Increase assets and decrease liabilities. b. Increase and decrease stockholders' equity. c. Increase assets and liabilities. d. Increase and decrease assets.