Part B C And D

On January 1, 2014, Professors Credit Union (PCU) issued 6%, 20-year bonds payable with face value of $500,000. The bonds pay interest on June 30 and December 31. 1. If the market interest rate is 5% when PCU 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 is7% when PCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain 3. Assume the issue price of the bonds is 97. Journalize the following bond transactions: a. Issuance of the bonds on January 1, 2014. b. Prepare an amortization schedule that determines interest at the effective rate for 2014. c. Prepare journal entries to record interest on December 31, 2014. d. Prepare journal entry to record the Retirement of the bond at maturity on December 31, 2033