Bond discount entries for bonds payable transactions

on July 1, year 1, Livingston Corporation, a wholesaler of manufacturing equipment issued a $46,000,000 of 20 year, 10% bonds and market (effective) interest rate of 11%, receiving cash of $42,309,236. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.

for all journal entries with a compound transaction, if an amount box does not require an entry, leave it blank.

1. journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, year 1. for a compound transaction, if an amount box does not require an entry, leave it blank.

2. journalize the entry to record the following:

a. The first semi annual interest payment on December 31 year 1 and the amortization of the bond discount using the straight-line method (for a compound transaction if an amount box does not require an entry leave a blank round to the nearest dollar.)

b. The interest payment on June 30, year 2, and the more decision of the bond discount, using the straight-line method. (for a compound transaction if an amount box does not require an entry, leave it blank. Round to the nearest dollar.)

3. determine the total interest expense for year 1. Round to the nearest dollar.

4. 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?

5. compute the price of $42,309,236 received for the bonds by using the table 1, table 2, table 3 and table 4. Round to the nearest dollar. Your total may vary slightly from the price given due to rounding differences.

Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1. Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20 year, 10% bonds at a market (effective interest rate of 11%,receiving cash of $42,309,236. 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 with a compound transaction, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1 Year 1. For a compound transaction, an amount box does not require an entry, leave it blank 99 2. Journalize the entries to record the following: a. The first serial Interest payment on December 31, Year 1, and the amortization of the bondscount, using the straight line method. (For compound transaction, an amount box does not require an entry, leave it blank Round to the nearest dollar.) Previous Next > Check My Works more Check My Works 214 Por & 7 8 b. The interest payment on June 30, Year 2, and the amortization of the bond discount, using the straight-line method. (For a compound transaction, if an amount box does not require an entry leave it blank. Round to the nearest dollar.) 9 3. Determine the total interest expense for Year 1. Round to the nearest dollar, 4. 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? 5. Compute the price of $42,309,236 received for the bonds by using the Table 1, Table 2, Tatile and Table 4. (Hound to the nearest dollar) Your total may vary slightly from the price given due to rounding differences Present value of the face amount Present value of the semiannual interest payments Price received for the bonds Previous Next Check My Work more woman & 9 5 6 8 7 6.5% 7% 1 Present of $1 at Compound Interest Du in naloda Periods 4.0 40% SN 33% 0.96154 0.95694 0.95238 0.94787 2 0.92456 0.91573 0.90703 0.89645 0.88900 0.876.30 0.86384 0.85161 4 0.85480 O.B3856 0.82270 0.80722 5 0.82193 0.80245 0.76353 0.76513 0.94340 0.89000 0.83962 0.79209 0.74726 0.93997 0.88166 0.82785 0.77732 0.72988 093458 0.87344 0.81630 0.76290 0.71299 6 7 8 9 10 0.79031 0.75992 0.73069 0.70259 0.67556 0.76790 0.73483 0.70319 0.67290 0.64393 0.74622 0.71058 0.67684 0.64461 0.61391 0.72525 0.68744 0.65160 0.61763 0.58543 0.70496 0.66505 0.62741 059190 0.55839 0.68533 0.64351 0.60423 0.56735 0.53273 0.66634 0.62275 0.58201 054393 0.50835 11 12 13 14 15 0.64958 0.62460 0.60057 0.57748 0.55526 0.61620 0.58966 0.56427 0.53997 051672 0.58468 0.55604 0.53032 0.S0SO7 OAB102 0.55491 0.52598 0.49856 0.47257 0.44793 0.52679 049697 0.46894 0.44230 041727 0.50021 0.46968 0.44102 0.41410 0.38883 0.47509 044401 0.41496 0.38782 0.36245 16 17 18 19 20 0.53391 0.51337 0.49363 0.47454 0.45639 0.49447 0.47318 0.45280 0.43330 0.41464 0.45811 0.43630 041552 0.39573 037689 0.42458 0.40245 0.38147 0.36158 0.34273 0.39365 0.37136 0.35034 0.33051 0.31180 0.36510 0.34281 0.32189 0.30224 0.26380 0.33873 0.31657 0.29586 0.27651 0.25842 21 22 23 24 25 0.43883 0.42196 0.40573 0.39012 0.37512 0.39679 0.37970 0.36335 0.34770 0.33273 0.35894 0.34185 0.32557 0.31007 0.29530 032486 0.30793 0.29187 0.27666 0.26223 0.29416 0.27751 0.26180 0.24698 0.23300 0.26648 0.25021 0.23494 0.22060 0.20714 024151 0.22571 0.21095 0.19715 0.18425 26 27 28 29 30 0.36000 0.34682 0.33348 0.32065 0.30832 0.31840 0.30469 0.29157 027902 0.26700 0.28124 0.26785 0.25509 0.24295 0.23138 0.24856 0.23560 0.22332 0.21168 0.20064 0.21981 0.20737 0.19563 0.18456 0.17411 0.19450 0.18263 0.17148 0.16101 0.15119 0.17220 0.16093 0.15040 0.14056 0.13137 31 32 33 76 35 0.29646 0.28506 0.27409 0.26355 0.25342 0.25550 0.24450 0.23397 0.22390 0.21425 0.22036 0.20987 0.19987 0.19015 0.18129 0.19018 0.18027 0.17087 0.16196 0.15352 0.16425 0.15496 0.14619 0.13791 0.13011 0.14196 911129 0.12516 0.11752 0.11035 0.12277 0.11474 0.10723 0.10022 0.09366 10 0.20829 000678 0.12193 0.14205 011246 009054 0.09722 45 0:17120 13796 0.04761 0.058 0.11130 008988 007265 0.04291 003395 50 0.14071 0.05429 011071 0.08720 Chp 11 12 12% 14% Present Value of $1 Compound Imerest Dueina periods Periods an 946 10% 1 0.92593 091743 Q.90909 2 085734 0.84168 0.826-45 3 0.79383 077218 0.75 131 4 0.73503 070843 068301 5 0.68058 0.64993 0.62092 0.90090 0.81162 0.73119 065873 0.59345 0.89286 0.79719 071178 063552 056743 0.28406 078315 069705 061332 054276 0.87719 0.74947 0.67497 059208 051937 0.63017 058349 054027 0.50025 0.46319 059627 054703 0.50187 046043 0.42241 0.5640 0.51316 0.46651 042410 0.38554 0.53464 048166 043393 0.39092 0.35218 0.50563 045235 040388 0.36061 0.32197 O48032 0A2506 037616 033288 0.29459 045559 0.39964 035056 030751 0.26974 9 10 11 12 13 14 15 OA2888 0.39711 0.36770 0.34046 031524 038758 0.35553 0.32618 0.29925 0.27454 0.35049 0.31863 0.28966 0.26333 0.23939 031728 0.28584 025751 0.23199 0.20900 0.28748 0.25668 022917 0.20462 0.18270 0.26070 0.23071 020416 0.18068 0.15989 023662 0.20756 012207 0.19971 0.14010 16 17 18 19 20 0.29189 027027 0.25025 0.23171 021455 0.25187 0.23107 021199 0.19449 Q.17843 0.21 763 0.19784 0.17985 0.16351 0.14864 0.18829 0.1663 0.15282 0.13768 0.12403 0.16312 0.14564 0.13004 0.1 1611 0.10367 0.14150 0.12522 0.11081 009806 0.08678 0.12289 0.10780 0094496 0.08295 0.07276 21 22 23 24 25 0.19866 0.18394 0.17032 0.15770 0.14602 0.16370 0.15018 0.13778 0.12640 0.11597 0.13513 0.12285 0.11168 0.10153 0.09230 0.11174 0.10067 0.09069 008170 0.07361 0,09256 008264 0.07379 0.06588 OD5882 007680 0.06796 0.06014 0.05323 0.04710 0.06383 0.05599 004911 004308 0103779 26 27 28 0.13520 0.12519 0.11591 0.10733 0.09938 010639 009761 0.00955 0.06215 0.02537 0.08391 0.07628 0.06934 0.06301 0.05731 0.06631 005974 005382 0.0-18-19 004368 0.05252 0.06689 0.04187 003738 0.03338 0.04168 0.03689 003264 0.02889 0.02557 0.03315 0.02908 0.02551 0102237 001963 30 31 32 33 34 35 009202 0.08520 0.07889 00305 0.06263 006915 0.06341 0.05820 0.0633 0.01899 0.05210 0.09736 004301 0103914 203598 0.03935 0.03545 03194 002878 02592 002980 0.02661 0.02376 0.02121 0.01894 0.02252 002002 001772 0.01568 0.01388 001722 01510 0.01325 0.0116 00101 40 004603 3184 0.02203 0:00 0.00753 000 45 0.03133 06 0.01372 LO 000409 50 002132 12345 000222 0.001 Present Value of Ordinary Annuity of $1 per Period ALON 45% Periods SN SSN 6% 6.54 74 1 096154 188809 2.77509 3.62990 4A5182 0.95694 167267 274896 3.58753 438998 0.95235 1.89941 272325 3.54595 432948 0.94787 184632 269793 3.50515 4.27028 0.94340 1.83339 267301 3.46511 421236 0.93897 1.82063 264843 3.42580 415568 0.93458 1B0B02 262432 338721 4.10020 6 7 00 5.24214 6.00205 673274 7A3533 8.11090 5.15787 5.89270 6.59589 7.26879 7.91272 5.07509 5.78637 6.46321 7.10789 7.72173 499553 568297 633457 695220 7.53763 491732 S.58238 6.20979 6.80169 7.326009 484101 5.48452 6,08875 6,65610 7.18883 4.76654 538929 597130 651523 702358 9 10 11 12 13 8.76048 938507 9.98565 1036312 11.11839 8.52892 911858 9,68285 10.22283 10.73955 8.30641 8.86325 9.39357 9.89864 10.37956 809254 8.61852 9.11708 958965 10.03758 7.88687 838384 8.85268 9.29498 9.71225 7.68904 815873 8.59974 9.01384 940267 749867 794269 835765 8.74547 9.10791 14 15 16 17 18 19 1165230 12.16567 1265930 13.13394 13.59033 11.23402 11.70719 12.15999 12.59329 13.00794 1083772 11.27407 11.6959 1200532 12.46221 1046216 10.86461 11.24607 11.60765 11.95038 10.10590 1047726 10.0760 11.15812 11.46992 9.76776 10.11058 1043247 107347 11.01851 944665 9.76322 10.05909 1033560 10.59401 14.02916 1445112 1485684 1524696 1562208 12.40472 13.78442 1414777 1449548 14.82821 1282115 13.16300 13.48857 13.79864 14,09394 12.27524 12.58317 1287504 13.15170 13.41393 11.76408 12.04158 12.30338 12550 12.78336 11.28498 11.53520 11.77014 11.99074 12.1978 1083553 1106124 1127219 1146933 11.65358 2010 1182578 15.98277 16 32959 22 1514661 15:45130 15.74287 16.02189 1628889 14.37519 14.64303 148083 151410 1537245 13.66250 1389810 14.12.142 1433310 1453375 13.00317 13.21053 130616 13.59072 13.70481 1239237 12.50 500 12.764 12.0743 13058 169837.1 17.29203 12.1371 1227762 1240104 30 195839 1285 15 59281 15.8068 33 16.54619 16 17022 17.24636 17.45101 1472 193 190420 15607507 15233 1510055 13192909 14.000 10 16 16 1449825 1320063 1321191 1145909 TX7661 13,64695 1253181 1264656 12757 1235101 1790767 841120 1566-661 16.1920 1619 1992 18 121990 12 15.06.30 1116353 13313 115633 16.54273 1545585 OSS 50 2148218 1975201 1633152 147 Present Value of Ordinary Annuky of $1 per Period Perlede BN 3% 1096 11 12 1 2 3 4 5 0.92593 178326 2.57710 331213 399271 0.91743 1.75911 29129 3.23972 3.88965 0.90909 1.73554 248583 3.16987 3.79079 0.90090 171252 244371 3.10245 369590 0.89286 1.69005 240183 3.03735 3.60478 0.18495 1.66810 2.36115 2.97447 3.51723 0.87719 1.64566 232163 2.91371 3.43306 OOO 4.62288 520637 574664 624689 67100B 4.48592 5.03295 5.58482 5.99525 6.41766 4.35526 4.86B42 5.3393 5.75902 614457 423054 471220 5.14612 553705 588923 4.11141 4.56376 4.96764 5.32825 5.65022 3.99755 44261 4.79677 5.13166 5A2624 3.88867 428830 463885 4.94637 5.21612 13 14 15 7.13896 753608 7.90378 822424 8.55948 6.80519 7.16073 7.48690 7.78615 B.06059 649506 6.81369 7.10335 7.36669 7.60608 6.20652 649236 674987 6.96187 7,19087 5.93770 6.19437 6.42355 6.62817 6.81086 568694 5.91765 6.12181 630249 646238 5.45273 5.66029 5.84235 600207 6.14217 16 17 18 19 20 885137 9.12164 9.37189 960360 981815 8.31256 8.54363 8.75563 8.95011 9.12855 7.82371 802155 8.20141 836492 8.51356 737916 7.54879 7.70162 783929 7.96333 6.97399 7.11963 7.24967 7.36578 7.46944 6.60388 6.72909 6.83991 693797 702475 6.26506 6.37286 6.46742 6.55037 662313 21 22 23 24 25 1001680 10.20074 1037106 1052876 1067478 9.29224 9.44243 9.58021 9.70661 9.82258 8.6486 8.77154 8.88322 8.98474 9.07704 8D7507 8.17574 8.26643 8.34814 8.42174 7.56200 7.64465 7.71943 7.78432 78434 7.10155 7.16951 722966 728288 732998 6.68698 6.74294 6.79206 6.83514 6.87293 22 28 29 10.80998 1093516 110510 11.15841 1125778 9.92897 1002658 10 11613 10.19828 1027355 9.16095 9.23722 930657 9961 9.42691 848806 854780 8.60182 865011 869379 7.89566 794255 798442 8.02181 8.05518 37167 740856 744120 7A7009 7/49565 680508 693515 696066 6.98304 7. 00:25 7,01988 31 32 33 111430 11.43500 11.5119 11.58693 11765457 1034280 10.40624 10.46444 115 105662 9.4790 9.5263 96943 OR 872315 8780 BBS4 8820 8.85524 8.08499 811159 13535 5656 1250 751828 253830 255502 257170 7.05935 7.TOOS 35 40 11 92461 1025736 9.77903 TOS 82478 70138 2100 45 1210040 1088120 900791 28252 2:32 12011 10 96163 99145 16 Z