1) Paul Co begin operations on 1 1 06 by issuing a 3 00 year term (Bullet) bond with a par value of $3,800,000 The bond pays interest semi annually On the date of issuance, the annual coupon rate of the bond is 5 250 while the annual required rate of return in the debt capital markets (the discount rate) is 6 5 Paul assumes that he will earn $1,700,000 in cash revenues and incur cash operating expenses of 47 000 of revenues each 6 month period for the next 3 00 fiscal years The corporate tax rate is assumed to be 35 00 1 Create an amortization table for the bond 2 Provide all journal entries and T accounts for this transaction over the next 3 years I have answered both questions The first image is the amortization, and the second one is the journal entries for the amortization However, my question is how to fit the journal entries for the 1,700,000 revenue and 47 expense and 35 tax Can you please plug these to the journal entry chart provided under Also in the journal entry chart, can you check whether all entries are correct (Especially my CP LTD third to the last line and last) Par Value 3,800,000 5250 2 2625 Coupon Rate 99750 Coupon Payment 65 0325 Discount Rate 2 Frequency Price of Bond 3,672,400 99 Discount on Bond 127,599 01 Amortization Table Based on Effective Interest Rate Method 1 2 3 4 5 6 Periods Bond Carrying Value Beginning of Pe 3733142 08 3754719 2 3,776,997 57 3,672,400 99 3,672,400 99 3,692,004 02 3712244 15 Coupon payments (3,800,000 X 0254) (Real Effects) 99,750 00 99,750 00 99,750 00 99,750 00 99,750 00 99,750 00 121,327 12 122,028 37 122,752 42 Interest Expense (Bond CV Bop X 0325) (Fake) 119353 0322 119,990 13 120,647 93 127,599 01 147,202 04 188,340 10 209,917 22 232,195 59 Bond Discount Beginning of Period (Bond Disc EOP P before) (Unamoritizec 127,599 01 167442 1729 20,897 93 21,577 12 22278 37 23,002 42 Amortized Bond Discount Bt (nt Coupon) 19603 0322 20,240 13 147202 0422 167442 17 188, 340 10 209,917 22 232,195 59 255,198 01 Bond Discount End of Period BH (Bond Disc BOP Amort Bond Disc) (Unam 127,599,01 Bond Carrying Value End of Period B (Bond CV Beginning) Amoritized Bond Disc) 3,672,400 99 3692,004 02 3 712,244 15 3,733,14 2 08 3,754,719 20 3,776,997 57 3,799,999 99

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1) Paul Co. begin operations on 1/1/06 by issuing a 3.00 year term (Bullet) bond with a par value of $3,800,000. The bond pays interest

1) Paul Co. begin operations on 1/1/06 by issuing a 3.00 year term (Bullet) bond with a par value of $3,800,000. The bond pays interest semi-annually. On the date of issuance, the annual coupon rate of the bond is 5.250% while the annual required rate of return in the debt capital markets (the discount rate) is 6.5%. Paul assumes that he will earn $1,700,000 in cash revenues and incur cash operating expenses of 47.000% of revenues each 6 month period for the next 3.00 fiscal years. The corporate tax rate is assumed to be 35.00%.

1. Create an amortization table for the bond.

2.Provide all journal entries and T-accounts for this transaction over the next 3 years.

> I have answered both questions. The first image is the amortization, and the second one is the journal entries for the amortization. However, my question is how to fit the journal entries for the 1,700,000 revenue and 47% expense and 35% tax%. Can you please plug these to the journal entry chart provided under?

> Also in the journal entry chart, can you check whether all entries are correct? (Especially my CP LTD - third to the last line and last)

image text in transcribed

Par Value 3,800,000 5250/2 .2625 Coupon Rate 99750 Coupon Payment 65 .0325 Discount Rate 2 Frequency Price of Bond 3,672,400.99 Discount on Bond 127,599.01 Amortization Table Based on Effective Interest Rate Method 1 2 3 4 5 6 Periods Bond Carrying Value Beginning of Pe 3733142.08 3754719.2 3,776,997.57 3,672,400.99 3,672,400.99 3,692,004.02 3712244.15 Coupon payments (3,800,000 X .0254) (Real Effects) 99,750.00 99,750.00 99,750.00 99,750.00 99,750.00 99,750.00 121,327.12 122,028.37 122,752.42 Interest Expense (Bond CV Bop X .0325) (Fake) 119353.0322 119,990.13 120,647.93 127,599.01 147,202.04 188,340.10 209,917.22 232,195.59 Bond Discount Beginning of Period (Bond Disc. EOP P before) (Unamoritizec 127,599.01 167442.1729 20,897.93 21,577.12 22278.37 23,002.42 Amortized Bond Discount Bt (nt-Coupon) 19603.0322 20,240.13 147202.0422 167442.17 188, 340.10 209,917.22 232,195.59 255,198.01 Bond Discount End of Period BH (Bond Disc BOP Amort. Bond Disc) (Unam 127,599,01 Bond Carrying Value End of Period B (Bond CV Beginning) Amoritized Bond Disc) 3,672,400.99 3692,004.02 3 712,244.15 3,733,14 2.08 3,754,719.20 3,776,997.57 3,799,999.99