Here are three cases related to issuance of bonds. 

• A Ltd issued 10 000 $100 bonds and received $97.50 cash for each. 

• B Ltd planned to issue 10 000 $100 bonds but found that the planned interest rate of 7 per cent was lower than market rates, and so received $915 000 for them. 

• C Ltd issued 10 000 $100 bonds for a premium of 5 per cent on face value. For each case:

1. Calculate the amount of any discount or premium on issue of the bonds.

2. Record the issue of the bonds. 

3. State whether interest expense over the life of the bonds will be higher, lower or the same as the cash interest paid on the bond each year.