On January 1, 2018 Doctors Credit Union (ECU) issued 7%, 20 year bonds payable with face value of $200,000. The bonds pay interest on June 30 and December 31 Read the requirements Requirement 1. If the market interest rate is 5% when DCU issues its bonds will the bonds be priced at face value, at a premium, or at a discount? Explain The 7% bonds issued when the market interest rate is 5% will be priced at They are in the market so investors will pay to acquire them Requirement 2. If the market interest rate is 1% when DCU issues its bonds, will the bonds ba priced at face alue, at a premium, or at a discount? Explain. The 7% bonds issued when the market interest rate is 3% will be priced at % They are in this market so investors will pay V to acquire them. Requirement 3. The issue price of the bonds is 93. Joumalize the bond transactions. (Assume bonds payable are amortized using the straight-line amortization method. Record debits first, then credits. Select explanations on the last line of the journal entry Round your answers to the nearest whole dollar) a. Joumalize the issuance of the bonds on January 1, 2018 Date Accounts and Explanation Debit Credit Requirements 2018 Jan. 1 1. If the market interest rate is 5% when DCU issues its bonds will the bands be priced at face value at a premium, or at a discount? Explain 2. If the market interest rate is 8% when DCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain 3. The issue price of the bonds is 93. Journalize the following bond transactions a. Issuance of the bonds on January 1, 2018 b. Journalize the payment of interest and amortization on June 30, 2018 b. Payment of interest and amortization on June 30, 2018 Date Accounts and Explanation Debit Credit c. Payment of interest and amortization on December 31, 2018. d. Retirement of the bond at maturity on December 31, 2037, assuming the last interest 2016 payment has already been recorded Jun 30 Print Done c. Journalize the payment of interest and amortization on December 31, 2018 Date Accounts and Explanation Debit 2018 Credit Dec. 31 d. Retirement of the bond at maturity on December 31, 2037, assuming the last interest payment has already been recorded. Date Accounts and Explanation Debit Credit 2037 Dec 31