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On January 1, 2014, Molk Motors, Inc. issued $500,000 of 10-year bonds payable. The annual interest...

On January 1, 2014, Molk Motors, Inc. issued $500,000 of 10-year bonds payable. The annual interest rate was 14%, and interest was payable semiannually each June 30 and December 31. Record the required journal entries for each of the following situations:

At what price would the bonds have sold if the market rate of interest was 16% and the future cash payments associated with the bonds were discounted to achieve this rate?

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