CHOICES FOR DROP BOXES (same choices for requirement 1 and 2) FIRST DROP BOX- discount, par (maturity) value, or premium SECOND DROP BOX- attractive or unattractive THIRD DROP BOX- maturity value, less than maturity value, or more than maturity value

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Assume that on April 1, 2018, Roland Corp. issues 9 percent, 10-year bonds payable with a maturity value of $300,000. The bonds pay interest on March 31 and September 30, and Roland amortizes any premium or discount using the straight-line method. Roland's fiscal year end is December 31. Read the requirements. Requirement 1. If the market interest rate is 7.5 percent when Roland Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. The 9 percent bonds issued when the market interest rate is 7.5 percent will be priced at They are in this market, so investors will pay to acquire them. Requirement 2. If the market interest rate is 9.5 percent when Roland Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. The 9 percent bonds issued when the market interest rate is 9.5 percent will be priced at V. They are in this market, so investors will pay to acquire them. Requirement 3. Assume that the issue price of the bonds is $315,000. Journalize each of the bonds payable transactions. (Do not round any intermediary computations, but then round all amounts you input into the journal entry tables to the nearest whole dollar. Record debits first, then credits. Exclude explanations from any journal entries. a. Issuance of the bonds on April 1, 2018 Journal Entry Accounts Requirements Debit Credit Date Apr 1, 2018 b. Payment of interest and amortization of premium on September 30, 2018. 1. If the market interest rate is 7.5 percent when Roland Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. 2. If the market interest rate is 9.5 percent when Roland Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. 3. Assume that the issue price of the bonds is $315,000. Journalize the following bonds payable transactions (round amounts to the nearest dollar): a. Issuance of the bonds on April 1, 2018 b. Payment of interest and amortization of premium on September 30, 2018 c. Accrual of interest and amortization of premium on December 31, 2018 d. Payment of interest and amortization of premium on March 31, 2019 Journal Entry Accounts Debit Credit Date Sep 30, 2018 Print Done c. Accrual of interest and amortization of premium on December 31, 2018. Journal Entry Accounts Date Debit Credit Dec 31, 2018 d. Payment of interest and amortization of premium on March 31, 2019. Journal Entry Date Accounts Debit Mar 31, 2019 Credit