Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1. Livingston Corporation, a wholesaler of manufacturing equipment, issued $5,300,000 of 6 ye, 8% bonds at a market (effective interest rate of 10%, receiving cash of 54,830,249. Interest on the bonds is payable semiannually on December 31 and lune 30. The fiscal year of the company is the calendar year. Required: 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 bank Cash Discount on Bonds Payable Bonds Payable lll 2. Journalize the entries to record the following: For a compound transaction, if an amount box does not require an entry, leave it blank. Round your answer to the nearest dollar a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount, using the straight-line method. Interest Expense Discount on Bonds Payable III 110 Cash b. The interest payment on June 30, Year 2, and the amortization of the bond discount, using the straight line method. Interest Expense Discount on Bonds Payable Cash s Feedback 3. Determine the total interest expense for Year 1. Round to the nearest dollar 1. 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 $1,830,249 received for the bonds by using Table 1, Table 2 table and Table 4. (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 semiannual interest payments Price received for the bonds