Calculating and recording bonds when stated rate and market rate are different [15—20 mi...

Calculating and recording bonds when stated rate and market rate are different [15—20 min]

On January 1, 2011, Snitzel Company issued $100,000 of 11.375%, five-year bonds payable when the market interest rate was 12%. Snitzel pays interest annually at year-end. The issue price of the bonds was $97,747.