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Q.3 Three year bonds are issued at face value of SR 100, 000 on Jan. 1, 2007, at a stated interest rate of 8%. Calculate

Q.3 Three year bonds are issued at face value of SR 100, 000 on Jan. 1, 2007, at a stated interest rate of 8%. Calculate the issue price of the bonds assuming a market interest rate of 10%. The present value of SR 1 is .75132 at 10% after 3 years and the present value of an ordinary annuity of SR 1 is 2.48685 at 10% after 3 years.

Prepare discount amortization table and journal entries for three years.

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