Shaw Communications Inc. is a diversified Canadian communications company that provides cable television, Internet, digital phone, telecommunications, and satellite direct-to-home services to more than 3 million customers. On October 1, 2009, the company sold long-term notes with the following specifications:

The underwriters (TD Securities Inc., RBC Dominion Securities Inc., CIBC World Markets Inc., Scotia Capital Inc., and National Bank Financial Inc.) that sold these notes to investors received an underwriting fee of \(\$ 5\) million and remitted to the company the net proceeds of \(\$ 1,241,037,500\) from the sale of these notes. The effective interest rate on these notes is 5.692 percent.
\section*{Required:}
1. Prepare the journal entries to record the sales of the notes on October 1,"2009.
2. Compute the interest expense that accrued from October 1, 2009, to December 31, 2009, the end of Shaw's fiscal year, and prepare the adjusting journal entries on December 31, 2009, to record interest expense and amortization of the discount on the notes. The company uses the effective interest method to amortize the discount.
3. Prepare the journal entry to record the payment of interest and amortization of the discount on April \(1,2010\).
4. Show the amounts that should be reported on Shaw's financial statements for the year 2009.
5. Compute the total amount of interest expense over the life of the notes.
6. After looking at the issue price, a student asked why the management of Shaw Communications did not simply sell the notes at 100 percent of the principal amount instead of selling them at a discount. How would you respond to this question?

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Principal amount: Maturity date: Issue price: Coupon rate: Interest payment dates: $1,250 million October 1, 2019 99.683 % of principal amount 5.65% April 1 and October 1