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The investment in the project requires a $800 million dollar investment. Issuing bonds at a...

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Accounting

The investment in the project requires a $800 million dollar investment. Issuing bonds at a 5% coupon rate with interest payable annually. The bonds will mature at the end of three years. The market interest rate at the time of the bond issuance is 8%. Complete an analysis with respect to the bond issuance and answer the following questions.

Would these bonds be issued at a premium, discount or face value? Determine Apache proceeds from the issuance of the bonds. How does the bond issuance affect assets, liabilities, and stockholders equity? If Apache decided to use the amortized cost method to account for the bonds, then what would be the interest and bond amortization for each of the three years? Please create an amortization table to present the yearly interest and amortization amounts.

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