On July 31, 2017, Mooney Inc. issued $500,000 of 5-year, 4% bonds at 102. Interest is payable

Question:

On July 31, 2017, Mooney Inc. issued $500,000 of 5-year, 4% bonds at 102. Interest is payable semi- annually on July 31 and January 31. Mooney's fiscal year end is January 31.
Instructions
(a) Is the market rate of interest higher or lower than 4%? Explain.
(b) Record the issue of the bonds on July 31, 2017.
(c) Record the payment of interest on January 31, 2018, assuming the semi-annual amortization amount for this interest period is $923.