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On July 1, 2014 Company issues exist1,000,000, 10%, bonds payable due in 10 years. Click here and use the slider to select the relevant interest
On July 1, 2014 Company issues exist1,000,000, 10%, bonds payable due in 10 years. Click here and use the slider to select the relevant interest rate to answer the following questions. a. If the market rate of interest is 8%, what is the selling price of the bonds payable? b. If the market rate of interest is 8%, what is the premium on the bonds payable? c. If the market rate of interest is 8%, what is the carrying amount of the bonds payable on the date of issuance? d. If the contract rate of interest is higher than the market rate of interest, the bonds will sell for _____ their face value. 2. a. If the market rate of interest is 6%, what is the selling price of the bonds payable? b. If the market rate or interest is 6%, what is the premium on the bonds payable? c. If the market rate of interest is 6%, what is the carrying amount of the bands payable on the date of ? d. If the contract rate of interest remains constant, the amount of the premium when the bond is issued will as the market rate of interest decreases
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