Question

(a) On 1/1/2015, Shocker Company issued $100,000 face valuebonds. The stated rate for these bonds is 10%, and the interest ispaid semi-annually, on June 30 and December 31. The market rate onthe date of issue was 12%. Bonds mature in three years, on December31, 2017. Required In the table provided, write the amount of thepayment, and the date of all payments that must be made by ShockerCompany to bond holders. Date Amount Date Amount

Date	Amount

(b) On 1/1/2015, Sooner Company issued $100,000face value bonds that make semi-annually on June 30 and December31. The coupon rate is 10% and each semi-annual payment is $5,000.The market rate on the date of issue was 8%. Bonds mature in fiveyears, on December 31, 2019.

Required

On the date of issue, calculate the market price of the bond andrecord journal entry for the issuance of the bond. Showcalculations.

(b)answer for Sooner Company here:

Market Price of the bond on 1/1/2015 is:

Journal entry to be recorded on 1/1/2015:

Calculations for Sooner Company:

Number of period = ___ discount rate to be used = ___ %

Market Price of the bonds:

=

=

(c) On 1/1/2015, Gator Companyissued $200,000 face value bonds that mature in five years, onDecember 31, 2019. The bonds have stated rate of 10%, withsemi-annual payments, on June 30 and December 31. The market rateon the date of issue was 9%, and the bonds were sold for$207,913.

Required

In the amortization table provided, complete the entries for thedates indicated. Write journal entries to be recorded on 6/30/2015and 12/31/2015.

Date	Cash Interest Paid	Interest Expense	Increase/decrease in Outstanding Balance	Outstanding Balance
1/1/2015
6/30/2015
12/31/2015