Scofield Company Limited is considering raising additional funds. Scofield plans to raise the money by issuing $400,000 of 4%, 5 year debentures on 1 March 2020. The debentures pay interest yearly on 1 March and 1 September. On 1 March 2020, the market rate of interest required on similar debentures by investors is 6%.

a.Will Scofield's debentures be issued at par, a premium or a discount?

b.Calculate and record the cash received on the debenture issue date.

c.Journalise the first interest payment on 1 September and amortise the premium or discount using the straight line interest method.

d.Journalise the entry required, if any, on 31 December related to the debentures.