Yearly interest installment = 2,000,000 x 7%

= $140,000

Present estimation of principal to be gotten at the maturity = Par estimation of bonds x Present worth factor (r%, n)

= 2,000,000 x Present worth factor (8%, 10)

= 2,000,000 x 0.46319

= $926,380

Present estimation important to be gotten occasionally over the term of the bonds = Interest x Present value annuity factor (r%, n)

= 140,000 x Present value annuity factor (8%, 10)

= 140,000 x 6.71008

= $939,411

Issue cost of bond = Present estimation of principal to be gotten at the maturity + Present estimation important to be gotten

occasionally over the term of the bonds

= 926,380+939,411

= $1,865,791

Was the abovebond issued at a discount or premium? and secondly what would be the journal entry to record the initial issuance of the bond on the books of the issuer?