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please help me solve this On January 1, 2024, Doctors Credit Union (DCU) issued 7%,20-year bonds payable with face value of $200,000. The bonds pay
please help me solve this
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 Decemher 31. Read the roguirements Requirement 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? Eupiain. The 7% bonds issued when the market interest rate is 5% will be priced at . They are in this market, so investors will pay to acquire them. Requirement 2 . If the market interest rate is 8% when DCU issues its bonds, Will the bonds be priced at fsce value, at a premium, or at a discount? Explain. The 7% bonds issued when the market inlerest rate is 8% will be priced at They are in this market, so investors will pay to-acquire them. Requirement 3. The issue price of the bonds is 93 . Joumaize the bond transactions. (Assume bonds payable are amortized using the straight-ine amortiration method. Record debits first, then credits. Select explanationt on the last line of the joumal entry. Round your anbwers to the nearest whole dollar.) 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 Step by Step Solution
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