I. Company A issues bonds with a par value of $870,000 on their stated issue date. The bonds mature in five years and pay 8% annual interest in semiannual payments.

Assume: On the issue date, the annual market rate for the bonds is 6%.

1) What is the amount of each semiannual interest payment for these bonds? _________________

2) Compute the price of the bonds as of their issue date using either the factors tables or excel formula. _________________

3) Prepare the journal entry to record the bonds' issuance: