South Carolina Beach Company has 696, 10-year bonds payable that mature on June

Question

South Carolina Beach Company has 696, 10-year bonds payable that mature on June 30, 2028. The bonds are issued on June 30, 2018, and South Carolina Beach pays interest each June 30 and December 31 Read the requiremen i Requirements Willthe bonds be issued at face value, at a premium, or at a discount if the market interest rate on the date of issuance is 4%? If the market interest rate is 7%? 1. 2. South Carolina Beach issued $900,000 of the bonds at 92. Round all calculations to the nearest dollar. a. Record issuance of the bonds on June 30, 2018. Record the payment of interest and amortization of the discount on December 31, 2018. Use the straight-line amortization method b. c. Compute the bonds' carrying amount at December 31, 2018. d. Record the payment of interest and amortization of discount on Print Done

Explanation / Answer

a)If market interest rate is 4%, issue at Premium as Coupon rate of 6% is more than Interest rate of 4%

b) If market interest rate is %, issue at Discount as Coupon rate of 6% is less than Interest rate of 7%

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