Essay
On December 31 2017 Lipton Inc. sold $3000000 (face value) of bonds. The bonds are dated December 31 2017 pay interest annually on December 31 and will mature on December 31 2020. The following schedule was prepared by the accountant for 2017. 
Instructions
On the basis of the above information answer the following questions. (Round your answer to the nearest dollar or percent.)
1. What is the stated interest rate for this bond issue?
2. What is the market interest rate for this bond issue?
3. What was the selling price of the bonds as a percentage of the face value?
4. Prepare the journal entry to record the sale of the bond issue on December 31 2017.
5. Prepare the journal entry to record the payment of interest and amortization of discount on December 31 2018.
Correct Answer:
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1. 
2.
3. The bonds sold at 97.5 .
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Correct Answer:
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2.
3.
The bonds sold at 97.5 ....
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