Problem # 1. On January 31 2013, Louis Company issued bonds.

Bonds data:

Maturity (par value): $400,000.

Bond term: 3-years.

Stated interest rate: 8% annually

Market interest rate: 10% annually

Interest is paid semiannually on July 31th and December 31st of each year.

Required: Calculate the bond selling price

1) Bond selling price = _____________________________

2) Prepare journal entry on January 31, 2013

3) Is this a bond with premium or discount? Explain why.