Interest Expense Huff Corporation issues 12- year 9 percent bonds with a par value of $150,000 on Janu- ary 1, 2001. Interest is paid semiannually on June 30 and December 31. Huff Corporation uses straight-line amortization of bond premiums or discounts in computing interest - expense.

a. If the bonds are issued at par value, give the journal entries for 2001 and 2002.

b. If the bonds are issued at 106, give the journal entries for 2001 and 2002.

c. If the bonds are issued at 98, give the journal entries for 2001 and 2002.

d. Why must amortization of the premium or discount be included in the computation of annual interest expense?