ON FEBRUARY 28, 2012, SNAPPER CORP. ISSUES 10% , 10-YEAR BONDS PAYABLE WITH A FACE VALUE OF 1,500,000. THE BONDS PAY INTEREST ON FEBRUARY 28 AND AUGUST 31. SNAPPER CORP. AMORTIZES BONDS BY THE STRAIGHT-LINE METHOD.

1. IF THE MARKET INTEREST RATE IS 9% WHEN SNAPPER CORP. ISSUES ITS BONDS, WILL THE BONDS BE PRICED PAR, AT A PREMIUM, OR AT A DISCOUNT? EXPLAIN.

2. IF THE MARKET INTEREST RATE IS 11% WHEN SNAPPER CORP ISSUES ITS BONDS, WILL THE BONDS BE PRICED PAR, AT A PREMIUM, OR AT A DISCOUNT? EXPLAIN.

3. ASSUME THAT ISSUE PRICE OF THE BONDS IS 94. JOURNALIZE THE FOLLOWING BONDS PAYABLE TRANSACTIONS

A. ISSUANCE OF THE BONDS ON FEB. 28.2012

B. PAYMENT OF INTEREST AND AMORTIZATION OF THE BONDS ON AUG 31ST, 2012

C. ACCRUAL OF INTEREST AND AMORTIZATION OF THE BONDS ON DEC 31ST, 2012 , THE YEAR END

D. PAYMENT OF INTEREST AND AMORTIZATION OF THE BONDS ON FEB. 28, 2013

4. REPORT INTEREST PAYABLE AND BONDS PAYABLE AS THEY WERE TO APPEAR ON THE SNAPPER CORP. BALANCE SHEET AT DEC 31. 2012