Required

$1.$ If the market interest rate is $11\frac{5}{8}\%$ when XTrade issues its bonds, will the bonds be priced at face value, a premium, or a discount? Explain.

$2.$ If the market interest rate is $17\%$ when XTrade issues its bonds, will the bonds be priced at face value, a premium, or a discount? Explain.

$3.$ Assume that the issue price of the bonds is $98.$ Journalize the following bond transactions:

a$.$ Issuance of the bonds on February $28,2020.$

b$.$ Payment of interest and amortization of the bonds on August $31,2020.$

c$.$ Accrual of interest and amortization of the bonds on December $31,2020.$

d$.$ Payment of interest and amortization of the bonds on February $28,2021.$

$4.$ Report interest payable and bonds payable as they would appear on the XTrade balance sheet at December $31,2020.$