Horton Enterprises issued $100,000, 10 year, 6 percent bonds payable on 1/1. Interest is payable each 6 months 1/1 and 7/1. The discount or premium is amortized by using the straight line method. Journalize the issuance, first interest payment and redemption of the bonds at maturity beneath the three conditions listed:
Requirements:
1) Journalize the issuance at par value.
2. Journalize the selling price of $90,000 if the market rate is 7 percent.
3) Journalize the selling price is $105,000 if the market rate is 5.5 percent.
4) Which condition results is the most interest expense? Explain why (describe in detail)?