Angel Corporation has $10,000,000 of 8.0% 25 year bonds dated May 1, 2018 with interest payable on April 30 and October 31. The corporations fiscal year ends on December 31, and it uses the straight line method to amortize bond premiums and discounts.

Assume the bonds are issued at 98.5 on May 1, 2018 Show your work and computations.

1. How much cash will be received on the sale?

2. How much is recorded as Bond Payable at the time of the sale?

3. What is the difference between #1 and #2 referred to and what is the dollar amount?

4. With regard to the bond interest payment on October 31, 2018:

1. How much cash is paid in interest?

2. How much is the bond amortization per period of the premium or discount?

3. What is the interest expense for the six months ended October 31, 2018?

5. What would be the carrying value of the bonds as of April 30, 2019 (one year later)?