A company is issuing $265,000 worth of 4-year bonds on March 2, 2008, bearing an interest rate of 6%, payable annually. Assume that the current market rate of interest is 5%.

a) Will the bonds be issued at a discount or at a premium? b) Calculate the value of the resulting discount or premium. c) Record the journal entry to reflect the sale of bonds and the appropriate discount or premium. Note that the present value factor for the principal is 0.8227 (5%, 4-years) and that the present value factor for the recurring interest payment is 3.5460 (5%, 4-years). Do not enter dollar signs or commas in the input boxes. Round your answers to the nearest whole number. Enter the debit accounts in alphabetical order. The bonds are issued at a : AnswerDiscountPremium Discount or premium amount: $Answer

Date	Account Title and Explanation	Debit	Credit
Mar 2	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon StockCost of Goods SoldDiscount on BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon StockCost of Goods SoldDiscount on BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon StockCost of Goods SoldDiscount on BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer