A company is issuing $340,000 worth of 4-year bonds on July 4, 2020, bearing an interest rate of 5%, payable annually. Assume that the current market rate of interest is 7%.

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 0.7629 (7%, 4-years) and that the present value factor for the recurring interest payment is 3.3872 (7%, 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 as applicable. Enter all credit accounts in alphabetical order as applicable. The bonds are issued at a : AnswerDiscountPremium Discount or premium amount: $Answer

Date	Account Title and Explanation	Debit	Credit
Jul 4	AnswerBonds PayableCashDiscount on Bonds PayableGain on Bond RedemptionInterest ExpenseInterest PayableLoss on Bond RedemptionNotes PayablePremium on Bonds PayableSales Revenue	Answer
	AnswerBonds PayableCashDiscount on Bonds PayableGain on Bond RedemptionInterest ExpenseInterest PayableLoss on Bond RedemptionNotes PayablePremium on Bonds PayableSales Revenue	Answer
	AnswerBonds PayableCashDiscount on Bonds PayableGain on Bond RedemptionInterest ExpenseInterest PayableLoss on Bond RedemptionNotes PayablePremium on Bonds PayableSales Revenue		Answer
	Issue of bonds at discount or premium