Hartford Research issues bonds dated January 1, 2013, that pay interest semiannually on June 30 and December 31. The bonds have a $40,000 par value and an annual contract rate of 10%, and they mature in 10 years. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided. Round all table values to 4 decimal places, and use the rounded table values in calculations. Round your 'Present Value' answers to the nearest whole dollar.)

Required: Consider each of the following three seperate situtations.

1. The market rate at the date of issuance is at 8%.

a) Complete the below table to determine the bonds issue price on January 1, 2013.

True values are based on:

n=
i=

Cash Flow	Table Value	Amount	Present Value
Par (maturity) value
Interest annuity
Price of bonds

(b) Prepare the journal entry to record their issuance.

Record the issue of bonds with a par value of $40,000 cash on January 1, 2013. Assume that the market rate of interest at the date of issue is 8%.

DATE	GENERAL JOURNAL	DEBIT	CREDIT
JAN. 1, 2013

2. The market rate at the date of issuance is 10%.

(a) Complete the below table to determine the bonds issue price to January 1, 2013.

Table values are based on:

n =
i =

Cash Flow	Table Value	Amount	Present Value
Par (maturity) value
Interest
Price of bonds

(b) Prepare the journal entry to record their issuance.

Record the issue of bonds with a par value of $40,000 cash on January 1, 2013. Assume that the market rate of interest at the date of issue is 10%.

Date	General Journal	Debit	Credit
Jan. 1, 2013

3. The market rate at the date of issuance is 12%.

(a) Complete the below table to determine the bonds issue price on January 1, 2013.

Table values are based on:

n =
i =

Cash Flow	Table Value	Amount	Present Value
Par (maturity) value
Interest
Price of bonds

(b) Prepare the journal entry to record their issuance.

Record the issue of bonds with a par value of $40,000 cash on January 1, 2013. Assume that the market rate of interest at the date of issue is 12%.

Date	General Journal	Debit	Credit
Jan. 1, 2013