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A company issues a bond with a face value of $300,000. It has a coupon rate of interest of 5.0% and term of eight (8)

  1. A company issues a bond with a face value of $300,000. It has a coupon rate of interest of 5.0% and term of eight (8) years. For each of the three scenarios, answer the following questions:
    1. What is the market value of the bond (e.g., how much will the company received from the lender when is issues the bond)?
    2. Is this bond issued at face value, at a premium, or at a discount?
    3. What is the annual interest expense to be recorded for this bond?
    4. Make the journal entry to record the issuing of the bond.
    5. Make the journal entry to record an interest payment.
    6. Make the journal entry to record the payoff of the bond at the end of its term.
    7. Scenarios:
      1. The market rate for the bond is 7.0%
      2. The market rate for the bond is 5.0%
      3. The market rate for the bond is 3.0%

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