Bond discount, entries for bonds payabl

e trapsactions

On July $1,20$Y$1,$ Livingston Equipment Co$.,$ a wholesaler of manufacturing equipment, issued $$6,000,000$ of $5-$year, $9\%$ bonds at a market $($effective$)$ interest rate of $10\%,$ receiving cash of $$5,768,327.$ Interest on the bonds is payable semiannually on December $31$ and June $30.$ The fiscal year of the company is the calendar year.

Required:

For all journal entries, if an amount box does not require an entry, leave it blank.

Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July $1,20Y1.$

$20Y1$ July $1$ Cash $-$

$5,768,327$

Journalize the entries to record the following:

a$.$ The first semiannual interest payment on December $31,20$Y$1,$ and the amortization of the bond discount, using the straight$-$line method. Round to the nearest dollar.

$20Y1$ Dec. $31$ Interest Expense $-$

Discount on Bonds Payable $-$

Cash

b$.$ The interest payment on June $30,20Y2,$ and the amortization of the bond discount, using the straight$-$line method. Round to the nearest dollar.

$20Y2$ June $30$ Interest Expense grad

Discount on Bonds Payable

Cash

Determine the total interest expense for $20Y1.$ Round to the nearest dollar.

$

Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest?

Yes

Compute the price of $$5,768,327$ received for the bonds by using the Present value at compound interest, and Present value of an annuity. Round your PV values to $5$ decimal places and the final answers to the nearest dollar. Your total may vary slightly from the price given due to rounding differences.