1) The price of a bond is equal to the face amount payable at maturity, plus the periodic interest payments. T or F

2)The interest rate we use to price a bond issue is the stated rate. T or F

Knowledge Check 01 On January 1, Year 1, McClurg Corporation issues 5%, 11-year bonds with a face amount of $70,000 for $76,180. The market interest rate is 4%. Interest is paid semiannually on June 30 and December 31. Complete the necessary journal entry for the issuance of the bonds by selecting the account names from the drop-down menus and entering the associated dollar amounts. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 > Record the first semi-annual interest payment for 5%, 11-year bonds with a face value of $70,000. Note: Enter debits before credits. Date General Journal Debit Credit June 30 Premium on Bonds Payable Interest Expense Cash