Micro Company issued 7 year bonds on January 1, 2016. The face value of the bonds

is $300,000. The stated interest rate on the bonds is 10 percent. The market rate

of interest at the time of issuance was 8 percent. The bonds pay interest semi-

annually on June 30

th

and December 31

st

.

REQUIRED:

1. Calculate the issuance (sale) price of the bonds.

2. Record the journal entry for the issuance (sale) of the bonds on January 1,

2016.