The Management of PT Authorized an Issue of $120,000 Bonds

Essay

The management of PT authorized an issue of $120,000 bonds payable, 6% (annual interest rate), dated January 1, 2000.The bonds mature on December 31, 2015 (5 years).Interest is payable each June 30 and December 31.The bonds were sold on May 1, 2010, at an effective (yield)rate of 8%.
(a)The bonds were sold at a ________ premium; discount (check one).
(b)Give the entry for PT to record the sale of the bonds on May 1, 2010.Show computations for the issue price.