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SHOW ALL YOUR WORKS FOR YOUR CALCULATIONS: Calculate Inter est expense, Premium on bonds payable, Cash in Sep 30, 2018 1. If the market interest
SHOW ALL YOUR WORKS FOR YOUR CALCULATIONS: Calculate "Inter est expense, Premium on bonds payable, Cash in Sep 30, 2018" 1. If the market interest rate is 8.5 percent when Pacific 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 10 percent when Pacific Corp. issues its bonds, will the bonds be priced at par, at a premium, or at a discount? Explain. Assume that the issue price of the bonds is $1,133,000. 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 Print Done b. Payment of interest and amortization of premium on September 30, 2018. Debit Credit Journal Entry Date Accounts Sep 30, 2018 Interest expense Premium on bonds payable Cash Assume that on April 1, 2018, Pacific Corp. issues 9 percent, 10-year bonds payable with a maturity value of $1,100,000. The bonds pay interest on March 31 and September 30, and Pacific amortizes any premium or discount using the straight-line method. Pacific's fiscal year end is December 31
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