1.) On January 1, 2014, Jack Company issues $3,744,000, 6%, 10-year bonds for cash of $3,013,464 when the market rate of interest is 9%. The bonds pay interest semi-annually on June 30 and December 31.

Round your answers to the nearest whole dollar amount.

Selling Price of Bonds		$
Face Value of Bonds
Discount on Bonds Payable		$
Cash interest payment		$
Discount amortization
Interest expense	$

2.) Journalize the first interest payment and the amortization of the bond discount on June 30, 2014.

Round your answers to the nearest whole dollar amount. If an amount box does not require an entry, leave it blank.

On July 1, 2014 Botwin Company issues $1,000,000, 10%, bonds payable. Use the sliders provided below for the market rate of interest and the number of semi-annual periods to answer the following questions.

1.	If the bonds have a 10-year term and are issued when the market rate of interest is 12%:

a.	How much semi-annual interest expense will the company report every six months?
	$

b.	How much of the bond discount will the company amortize every six months?
	$

c.	How much cash interest will the company pay to bondholders every six months?
	$

d.	If the market rate of interest remains constant, and the number of periods decreases, the semi-annual discount amortization will - Select your answer -decreaseincreaseremain the sameCorrect 4 of Item 5.

2.	If the bonds have a 5-year term and are issued when the market rate of interest is 14%:

a.	How much semi-annual interest expense will the company report every six months?
	$

b.	How much of the bond discount will the company amortize every six months?
	$

c.	How much cash interest will the company pay to bondholders every six months?
	$