On January 1, 2024, Mechanics Credit Union (MCU) issued 6%, 20-year bonds payable with face value of $700,000. The bonds pay interest on June 30 and December 31. Read the requirements. Requirement 1. If the market interest rate is 5% when MCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. The 6% bonds issued when the market interest rate is 5% 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 7% when MCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. The 6% bonds issued when the market interest rate is 7% 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 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. Journalize the issuance of the bonds on January 1, 2024. Date 2024 Jan. 1 Cash Bonds Payable Accounts and Explanation Debit Credit