Columbus, Inc., issued \(\$ 50,000\) of 10 -year, \(6 \%\) bonds payable on January 1, 2006. Columbus pays interest each January 1 and July 1 and amortizes discount or premium by the straight-line method. The company can issue its bonds payable under various conditions:

a. Issuance at par (maturity) value

b. Issuance at a price of 95

c. Issuance at a price of 105

1. Journalize Columbus's issuance of the bonds and first semiannual interest payment for each situation. Explanations are not required.

2. Which bond price results in the most interest expense for Columbus? Explain in detail.