On January 1, 2018, Professors Credit Union(PCU) issued 8%, 20-year bonds payable with face value of $200,000. The bonds pay interest on June 30 and December 31.

Read the Requirements

On January 1, 2018, Professors Credit Union (PCU) issued 8%, 20-year bonds payable with face value of $200,000. The bonds pay interest on June 30 an December 31 Read the requirements Requirement 1. If the market interest rate is 6% when PCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain The 8% bonds issued when the market interest rate is 6% will be priced at a premium . They are attractive in this market, so investors will pay more than face value to acquire them Requirement 2. If the market interest rate is 9% when PCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain The 8% bonds issued when the market interest rate is 9% will be priced at a discount . They are unattractive in this market, so investors will pay less than face value to acquire them Requirement 3. The issue price of the bonds is 94. Journalize the bond transactions. (Assume bonds payable are amortized using the straight-line amortiz 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. Journalize the issuance of the bonds on January 1, 2018 Date 2018 Jan. 1 Accounts and Explanation Debit Credit Choose from any list or enter any number in the input fields and then click Check Answer parts remaining Clear All Check