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A company is issuing $$340,000$ worth of $5-$year bonds on August $1,2023,$ bearing an interest rate of $2\%,$ payable annually. Assume that the current market rate of interest is $7\%.$

a$)$ Will the bonds be issued at a discount or at a premium?

b$)$ Calculate the value of the resulting discount or premium.

c$)$ Record the journal entry to reflect the sale of bonds and the appropriate discount or premium.

Note that the present value factor for the principal is $0\mathrm{.}7130(7\%,5-$years$)$ and that the present value factor for the recurring interest payment is $4\mathrm{.}1002(7\%,5-$years$).$

Do not enter dollar signs or commas in the input boxes.

Round your answers to the nearest whole number.

Enter the debit accounts in alphabetical order as applicable. Enter all credit accounts in alphabetical order as applicable.

The bonds are issued at a : Answer

Discount

Discount or premium amount: $Answer

Date Account Title and Explanation Debit Credit

Aug $1$ Answer

Cash

Answer

Answer

Discount on Bonds Payable

Answer

Answer

Bonds Payable

Answer

$340000$

Issue of bonds at discount or premium