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Bringham Company issues bonds with a par value of $800,000 on their stated issue date. The bonds mature in 10 years and pay 6% annual
- Bringham Company issues bonds with a par value of $800,000 on their stated issue date. The bonds mature in 10 years and pay 6% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%.
- What is the amount of each semiannual interest payment for these bonds?
- How many semiannual interest payments will be made on these bonds over their life?
There will be 20 semiannual payments made over the lifetime of these bonds.
- Use the interest rates given to determine whether the bonds are issued at par, at a discount, or at a premium.
- Compute the price of the bonds as of their issue date.
- Prepare the journal entry to record the bonds' issuance.
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