(1) BONDS 1) Bond Valuation, Carrying Value and Journal Entries (35 points) Company XYZ issued two Bonds (A and B) under the following conditions: Bond A) Face Value Principal: $ 1,000,000 (1000 Bonds at Par value $ 1,000 each) Maturity: 5 years Coupon rate: 4% per year (paid semi-annually) Market interest rate at the moment of issuance: 4.5% per year Bond B) Face Value Principal: $ 500.000 (500 bonds at Par value $ 1,000 each) Maturity: 5 years Coupon rate: 3.5% per year (paid annually)- Market interest rate at the moment of issuance 3% per year- a) Calculate the Carrying value of Bond A and B at the moment of issuance of the Bonds (5 points) b) If you were to depreciate the Discount Premium on the Bonds in a Linear way what would be the amount of Amortization per period of the coupon payment 2 (3 points) c) Calculate the interest expense per period for Bond A and B under the Linear Method (2 points) d) Make a Journal Entry of the first Coupon payment Interest Expense for each Bond A and B (5 points) e) What would be the Interest Expense of each Bond per period if the Effective Interest Method would be used to Amortize the Discount Premium on these Bonds (make a table overview for each Bond) (5 points) f) Make the Journal Entries for Bond A and B of: (5 points) 1) The issuance of each Bonde 2) At Maturity of each Bond