* Requirements 1. If the market interest rate is 8.5 percent when Alaska Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. 2. If the market interest rate is 9.5 percent when Alaska Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. 3. Assume that the issue price of the bonds is $1,236,000. Journalize the following bonds payable transactions (round amounts to the nearest dollar): a. Issuance of the bonds on April 1, 2018 b. Payment of interest and amortization of premium on September 30, 2018 c. Accrual of interest and amortization of premium on December 31, 2018 d. Payment of interest and amortization of premium on March 31, 2019 Assume that on April 1, 2018, Alaska Corp. issues 9 percent, 10-year bonds payable with a maturity value of $1,200,000. The bonds pay interest on March 31 and September 30, and Alaska amortizes any premium or discount using the straight-line method. Alaska's fiscal year end is December 31. Read the requirements. Requirement 1. If the market interest rate is 8.5 percent when Alaska Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. The 9 percent bonds issued when the market interest rate is 8.5 percent will be priced at . They are in this market, so investors will pay V to acquire them. Requirement 2. If the market interest rate is 9.5 percent when Alaska Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. V. They are in this market, so investors will The 9 percent bonds issued when the market interest rate is 9.5 percent will be priced at pay V to acquire them. Assume that on April 1, 2018, Alaska Corp. issues 9 percent, 10-year bonds payable with a maturity value of $1,200,000. The bonds pay interest on March 31 and September 30, and Alaska amortizes any premium or discount using the straight-line method. Alaska's fiscal year end is December 31. Read the requirements. a. Issuance of the bonds on April 1, 2018. Journal Entry Date Accounts Debit Credit Apr 1, 2018 b. Payment of interest and amortization of premium on September 30, 2018. Journal Entry Accounts Debit Credit Date Sep 30, 2018 Assume that on April 1, 2018, Alaska Corp. issues 9 percent, 10-year bonds payable with a maturity value of $1,200,000. The bonds pay interest on March 31 and September 30, and Alaska amortizes any premium or discount using the straight-line method. Alaska's fiscal year end is December 31. Read the requirements. c. Accrual of interest and amortization of premium on December 31, 2018. HE Journal Entry Date Accounts Debit Credit Dec 31, 2018 d. Payment of interest and amortization of premium on March 31, 2019. Journal Entry Date Accounts Debit Credit Mar 31, 2019
