On january 1, 2024, Doctors credit union issued 7% 20 - year bonds payable with face value :
On January 1, 2024, Doctors Credit Union (DCU) issued 7\%, 20-year bonds payable with face value of $200,000. The bonds pay interest on June 30 and December 31. Read the reguirements. Requirement 1. If the market interest rate is 5% when DCU issues its bonds. will the bonds be priced at face value, at a premkum, or at a discount? Explain. The 7% bonds issued when the market interest rate is 5% will be priced at They are in this maket, so investors will pay to acquire them. Requirement 2. If the market interest rate is b\% when DCU issues lis bonds. will the bonds be priced at face value, at a premium, or at a discount? Explain. The 7% bonds issued when the market imerest rate is 8% will be priced at They are in this market, so investors will pay 10 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 debis first, then credits. Select explanations on the last line of the joumal entry. Round your answers to the nearest whole dollar.) a. Journalize the issuance of the bonds on January 1, 2024 Requirements 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. 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 1,2024 b. Payment of interest and amortization on June 30,2024. c. Payment of interest and amortization on December 31, 2024. d. Retirement of the bond at maturity on December 31, 2043, assuming the last interest payment has already been recorded. On January 1, 2024, Doctors Credit Union (DCU) 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 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. The 7% bonds issued when the market interest rate is 8% will be priced at They are in this market, so investors will pay acquire them. Requirement 3. The issue price of the bonds is 93 . Journalize the bond transactions. (Assume bonds payable are amortized using the straight-line amortization method. Re debits first, then credits. Select explanations on the last line of the joumal entry. Round your answers to the nearest whole dollar.)
