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I need help with problems C and D and requirement 4 at the bottom On February 28, 2012, Martin Corp. issues 89, 10-year bonds payable
I need help with problems C and D and requirement 4 at the bottom
On February 28, 2012, Martin Corp. issues 89, 10-year bonds payable with a face value of $900,000. The bonds pay interest on February 28 and August 31. Marlin Corp. amortizes bonds by the straight-line method. Read the requirements Requirement 1. If the market interest rate is 7% when Martin Corp. issues its bonds, will the bonds at a premium, or at a discount? Explain. The 8% bonds issued when the market interest rate is 7% will be priced at a premium attractive in this market, so investors will pay more than maturity value to acquire them. Requirement 2. If the market interest rate is 9% when Martin Corp. issues its bonds, will the bonds at a premium, or at a discount? Explain. The 8% bonds issued when the market interest rate is 9% will be priced at a discount unattractive in this market, so investors will pay less than maturity value to acquire them. Requirement 3. Assume that the issue price of the bonds is 99. Journalize the following bonds pay Record debits first, then credits. Explanations are not required.) a. Record the issuance of the bonds on February 28, 2012 Journal Entry Date Debit Feb 28 Cash 891,000 Discount on Bonds Payable 9,000 Bonds Payable b. Record the payment of interest and amortization of the bonds on August 31, 2012. Journal Entry Date Accounts Debit Aug 31 Interest Expense 36,450 Discount on Bonds Payable Cash c. Record the accrual of interest and amortization of the bonds on December 31, 2012, the year enc until the final answer. Then round to the nearest whole dollar.)Step by Step Solution
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