P14-32 On January 1, 2014 Mechanics Credit Union (MCU) issued 5%, 20-year bonds payable with face value of OR 300,000. The bonds pay interest on June 30 and December 31. Requirements: 1. If the market interest rate is 6% when MCU issues its bonds, will the bonds be prices at face value, at premium, or discount? Explain. 2. If the market interest rate is 8% when MCU issues its bonds, will the bonds be prices at face value, at premium, or discount? Explain. 3. The issuance price of the bonds is 95. Journalize the following bond transactions: 1. Issuance the bonds on January 1, 2014 2. Payments of interest and amortization on June 30, 3014 3. Payments of interest and amortization on December 31, 3014 4. Retirement of the bond at maturity on December 31, 2033. 14-10 P14-33 Refer to the information in Problem P14-32. Assume the issue price of the bonds is 102. Journalize the following bond transactions: 1. Issuance the bonds on January 1, 2014 2. Payments of interest and amortization on June 30, 3014 3. Payments of interest and amortization on December 31, 3014 4. Retirement of the bond at maturity on December 31, 2033. 14-11