If the market rate of interest is 7%, the price of 6% bonds paying interest face value of $500,000 will be a. equal to $500,000 b. greater than $500,000 se imel e. less than $500,000 d. greater than or less than $500,000, depending on the maturity date of the bonds 15. When the market rate of interest on bonds is higher than the contract rate, the bonds willi sell at? a. a premium b. their face value c. their maturity value d. a discount 16. The journal entry a company records for the issuance of bonds when the contract rate and the market rate are the same is to a. debit Bonds Payable, credit Cash b. debit Cash and Discount on Bonds Payable, credit Bonds Payable c debit Cash, credit Premium on Bonds Payable and Bonds Payable d. debit Cash, credit Bonds Payable 17. The journal entry a company records for the issuance of bonds when the contract rate is greater than the market rate would be a. debit Bonds Payable, credit Cash b. debit Cash and Discount on Bonds Payable, credit Bonds Payable c. debit Cash, credit Premium on Bonds Payable and Bonds Payable d. debit Cash, credit Bonds Payable 18. The journal entry a company records for the issuance of bonds when the contract rate is less than the market rate would be a. debit Bonds Payable, credit Cash debit Cash and Discount on Bonds Payable, credit Bonds Payable b. c. debit Cash, credit Premium on Bonds Payable and Bonds Payable d. debit Cash, credit Bonds Payable ear bond that pays interest If the market rate of interest is 10%, a $10,000, 12%, 1 semiannually would sell at an amount account a. less than face value b. equal to the face value c. greater than face value d. that cannot be determined 19, sued at a premium, the stated interest rate is If bonds are is a. higher than the market rate of interest b. lower than the market rate of interest c. too low to attract investors 20. adjusted to a higher rate of interest