Questions:

1. What are the advantages of debt over equity? If debt is cheaper, why would anyone choose equity? How do taxes play a role in this?
2. Assume the following for a standard bond issue within the United States:
   1. The face value of the bonds is $95,000.
   2. Stated rate on the bond is 8%.
   3. Interest is paid every 6 months (8%/2 = 4% every payment).
   4. The bonds are due in 10 years.
   5. Assume 3 scenarios, the market rate is 8%, 7%, and 10%.

Provide an amortization table for all 3 scenarios as well as the journal entries for the inception of the issue and the first interest payment. Use Excel for the question, it will greatly decrease the time you need to spend on it.