On November 1, 2020, Plucky Ltd issued $1,000,000 bonds with a 6% coupon rate and payments every April 30 and October 31. The bonds mature on October 31, 2025. On November 1, 2020, the yield on the bonds was 4%.

On October 1, 2024, Plucky Ltd repurchased $540,000 of the bonds at 103%.

On October 1, 2024, Plucky Ltd also issued $500,000 bonds with a 6% coupon rate and payments every April 1 and October 1 to yield 8%. The new bonds mature on October 1, 2025.

Required:

1. Record all journal entries for 2020.
2. Record the journal entry for the interest payment on April 30, 2021.
3. Record the journal entry for the repurchase of the bonds on October 1, 2024. 
4. What effect will the transactions on October 1, 2024 have on the company’s future financial leverage ratio? You may answer “Increase”, “decrease”, “no change”, or “unable to determine” for the answer. Provide a brief and concise explanation. Calculations are not necessary.