Abbot Corporation is a real estate developer looking to build a new property in the Metro Vancouver area. In order to do so$,$ they need

to raise capital to finance the construction. The company has investigated two alternatives:

Issue $$84\mathrm{.}5$ million $10-$year bonds, with an $8\%$ coupon per annum. The company can buy them back on the open market at the

end of $5$ years; analysts estimate that it would cost $$92,000,000$ to reacquire the $$84\mathrm{.}5$ million dollar issue. The market rate is

$6\mathrm{.}5\%.$

Issue $$84\mathrm{.}5$ million of preferred shares at par. The shares can be redeemed at the company's option at the end of $5$ years for a

price estimated to be in the region of $$89,000,000.$ Annual $($cumulative$)$ dividends are set at $6\mathrm{.}75\%.$

Required:

Provide journal entries to record issuance, annual dividends, or interest $($for one year only$)$ of both the shares and debt. $($If no entry is

required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Do not round intermediate

calculations. Round your final answers to the nearest whole dollar amount.$)$

Assume Abbot's tax rate is $30\%.$ What is the after$-$tax annual cost of the various alternatives?