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S9-7 (Learning Objective 2: Determine bond prices at par, discount, or premium) Determine whether the following bonds payable will be issued at par value, at

S9-7

(Learning Objective 2: Determine bond prices at par, discount, or premium) Determine whether the following bonds payable will be issued at par value, at a premium, or at a discount:

a. The market interest rate is 7%. Horton Corp. issues bonds payable with a stated rate of 6 1/2%.

b. Sharp, Inc., issued 6% bonds payable when the market rate was 5 3/4%.

c. Houston Corporation issued 3% bonds when the market interest rate was 3%.

d. Ontario Company issued bonds payable that pay stated interest of 8%. At issuance, the market interest rate was 8 1/4%

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