PLEASE SHOW ALL WORK Cactus Construction sells $1000000 of 8% bonds on Jan

PLEASE SHOW ALL WORK

Cactus Construction sells $1000000 of 8% bonds on January 1 20XX. The bonds are unsecured but registered to the name of the purchaser. The
bonds are due in 5 years with interest payable annually at year-end.

1.Determine the value of the bonds if the market interest rate is 9%. Show the effect on the accounting equation (by
account title) AND the journal entries at the date of issuance and at year-end.

PLEASE SHOW ALL WORK

2.Determine the value of the bonds if the market interest rate is 7%. Show the effect on the accounting equation (by
account title) AND the journal entries at the date of issuance and at year-end.

PLEASE SHOW ALL WORK