ACCt - Assume that on April 1,2008, Roland Corp

Assume that on April 1,2008, Roland Corp. issues 8%, 10-year bonds payable with a maturity value of $400,000. The bonds pay interest on March 31 and September 30, and Roland amortizes any premium and discount by the straight-line method. Roland's fiscal year-end is December 31.

Requirements:
1) If the market interest rate is 7 1/2% when Roland issues its bonds, will the bonds be priced at maturity value, at a premium, or at a discount?
2) If the market interest rate is 9% when Roland issues its bonds, will the bonds be priced at maturity, premium, or discount?
3) Assume that the issue price of the bonds is 101. Journalize the following bonds payable transactions:
A) Issuance of the bonds on April 1, 2008.
B) Payment of interest and amortization of premium on September 30, 2008.
C)Accrual of interest and amortization of premium on December 31, 2008.
D) Payment of interest and amortization of premium on March 31, 2009.