1) Determine the price of a $1 million bond issue under each ofthe following independent assumptions:
| Maturity | Interest paid | Stated rate | Effective (market) rate |
|---|
| 1 | 10 years | Annually | 10% | 12% |
|---|
| 2 | 10 years | Semiannually | 10% | 12% |
|---|
| 3 | | Semiannually (July 1 and January 1) | 12% | 10% |
|---|
| 4 | | Semiannually | 12% | 10% |
|---|
| 5 | 20 years | Semiannually | 12% | 12% |
|---|
2) Prepare journal entries to record the issuance for each ofthe following the above independent assumptions
3) Only for Assumption 1 and 2, prepare an amortization schedulethat determines interest at the effective rate.
