Question 1 4 points Save Answer Note: please enter all numbers WITHOUT dollar si

Question

Question 1 4 points Save Answer Note: please enter all numbers WITHOUT dollar signs ($) or any decimals (i.e. enter $24,000.00 as 24000). If an answer is a negative number please enter it as a regular positive number. If the answer is zero or not applicable please enter 0 (a zero). On March 1, 2017 SOFTER Corporation issued $100 000 of five-year, 6% bonds. The bonds pay interest se mi annually on Sepember 1 and March 1. SOFTER's year end is December 31 and it makes adjusting entries annually a if the bonds were issued at 102, was the market rate of interest higher or lower than 6%? (please type either higher or lower) Lower b. If the bonds were issued at 102, were the bonds issued at a premium or a discount? (please type either premium or discount) Discount c If the bonds had been issued at 98 how much would SOFTER have received, in total, from issuing the bonds? d. If the bonds had been issued at 98 how much interest would SOFTER pay on September 1, 2017 s Moving to another question will save this response. > Question 1 of 2

Explanation / Answer

1.

A. Lower

Explanation:

As bonds is issued on more than face value, here market interest is lower , that's the company getting extra money for paying higher interest than market rate.

B.

Premium

Explanation:

As it is issued on $102 which is more than face value of bond by $2. So they are issued at premium

C.

No of bonds issued=$100,000/$100=1000 bonds

Money received if bonds are issued at 98:

=Number of bonds× issue price per bond

=1000×98

=98000

d. Interest paid on September, 2017:

=100,000×6%×1/2

=3000

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