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. Yeaf 1 July 1 Cash Discount on Bonds Payable 0 0 Bonds Payable Feedback Check My Wor 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount, using the straight-line method. (Round to the nearest dollar) Year 1 Dec. 31 Interest Expense Discount on Bonds Payable 0 X 00 Cash X b. The Interest payment on June 30, Year 2, and the amortization of the bond discount, using the straight-line method. (Round to the nearest dollar) Year 2 June 30 Interest Expense Discount on Bonds Payable X Cash Feedback Check My Work 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? Yes 5. Compute the price of $42,309,236 received for the bonds by using the present value tables in Exhibit 5 and Exhibit 7. (Round 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 semi-annual interest payments Price received for the bonds