1 CUE you will to do Calibri 14 NA T . Wrap Text General Paste 6 Copy 3 Format Painter Clipboard A : * $ % & Font Conditional Format as Cell Formatting Table Styles Insert Delele Format Alignment Number & Styles LONG TERM LIABILITIES Cells LONG TERM LIABILITIES 20 points Ardvark company wants to finance a new business venture into guided trips in Yellowstone. Additionally, the company wants to add another building on their land to offer more services for local customers Ardvark plans to raise the capital by issuing $210,000 of 7.5%, six-year bonds on January 2, 2020. The bonds pay interest semiannually on June 30 and December 31. The market rate is 8%. The company receives $208,476 when z the bonds are issued. The company also issues a mortgage payable for $450,000 on January 2, 2020. The proceeds from the mortgage 9 will be used to construct the new building. The mortgage requires annual payments of $45,000 plus interest for 10 ten years, payable on December 31. The mortgage interest rate is 8%. 12 Requirements Will the bonds issue at face value, a premium, or a discount? REQUIREMENT 1: REQUIREMENT 3 Record the following transactions. Include dates and round to the nearest dollar. Omit explanations. Date Interest Expense Cash received from the bond issue. b. Jun 30 Cash received from the mortgage payable. Semiannual bond interest payments for 2020. Amortize the premium or discount using the straight-line amortization method. Dec. 31 Payment on the mortgage payable for 2020 Dec. 31 Retirement of bond at maturity on December 31, 2026, assuming the last interest payment has already been recorded. Totals 3 Calculate the total interest expense incurred in 2020. Payroll Stocks & Dividends Bonds Present Value HAHN Format Painter Clipboard G $ . % 9 Conditional Format as Formatting Table Styles Cell Styles Font Alignment Number A2 X fe LONG TERM LIABILITIES Calculate the total interest expense incurred in 2020. REQUIREMENT 2 - JOURNAL ENTRIES 2020 Date Accounts DR CR c. 2026 e Payroll Stocks & Dividends Bonds Present Value O Type here to search