On February? 28,2016 Phy shy Corp. issues 10?%, 5?-year bonds payable with a face value of $ 2,100,000. The bonds pay interest on February 28 and August 31. Physhy Corp. amortizes bond discount by the? straight-line method.

If the market interest rate is 9?% when Physhy Corp. issues its? bonds, will the bonds be priced at? par, at a? premium, or at a? discount? Explain.

REQUIREMENTS:

1.	If the market interest rate is 9?% when Physhy 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 11?% when Physhy 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 94. Journalize the following bonds payable transactions.
	a.	Issuance of the bonds on February? 28, 2016.
	b.	Payment of interest and amortization of the bond discount on August? 31, 2016.
	c.	Accrual of interest and amortization of the bond discount on December? 31, 2016?, the? year-end.
	d.	Payment of interest and amortization of the bond discount on February? 28, 2017.
4.	Report interest payable and bonds payable as they would appear on the Physhy Corp. balance sheet at December? 31,2016.