Bond Discount, Entries for Bonds Payable Transactions On July 1, 2081, Livingston Corporation, a wholesaler of manufacturing equipment, issued $7,400,000 of 5-year, 10% bonds at a market (effective) interest rate of 12%, receiving cash of $6,855,319. 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, it 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, 2011 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 2011, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar b. The interest payment on June 30, 2012, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar 3. Determine the total interest expense for 2011. 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 $6,855,319 received for the bonds by using the present value tables in Appendix A. Round your pv values to s decimal places and the final answers 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 Dronne Neyt 3. Determine the total interest expense for 2011. 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 $6,855,319 received for the bonds by using the present value tables in Appendix A. Round your pv values to s decimal places and the final answers 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 Dronne Neyt 12 13 14 11 9 Present Value of 51 Compound Interest Dunia Periode Periods 10% 1 0.92593 0.91743 0.90909 0.85734 0.34168 0.62645 3 079383 0.77218 0.75131 4 073503 0.70043 068301 5 068053 0.60 062092 ON 0.78315 0-90090 0.01162 073119 0.65673 059345 0.89286 0.79719 0.21170 0,63552 0.56743 0:69305 0.61332 054276 07719 0.76947 067497 0.59200 051937 6 7 0.63017 0.50349 054027 0.50025 0.46319 059627 0.54703 0.50187 0.4604) 042241 0.56447 0.51316 046651 0.42410 0.38554 053464 0.48166 04393 0.39092 035218 050663 0.45235 040388 0.36061 0.32197 041032 0.42506 0.37616 033280 0.29459 0.45559 0.39964 0.35056 0.30751 0.26974 9 10 11 12 13 14 15 0.42868 0.39711 0.36770 0.34046 0.31524 0.38753 0.35553 0.3210 0.29925 0.27454 0.35019 031063 0.20966 0.26333 023939 0.31726 020504 0.25751 023199 020900 0.28741 0.25668 0.22917 0.26070 02.1071 0.20416 0.10068 0.15909 0.2.7662 0.2016 018207 0.15971 0.14010 0.18270 16 17 10 0.29119 027027 0.25025 0.23171 0.21455 0.25187 0.23107 0.21199 0.19449 0.17043 021763 0.1974 0.17996 016351 14M 0.18829 016963 0.15282 0.13260 0.12403 0.16312 0.14564 0.13004 0.11611 0.10367 0.14150 0.12522 011001 0.09806 0.00678 012209 0.10780 0.09456 000295 0.07276 20 21 22 23 24 25 0.1966 0.10394 0.17032 0.15770 0.14600 0.16170 0.15018 0.13778 0.126-00 0.11597 0.13513 0.12285 0111 010153 0.09230 011174 0.10067 OOR 000170 0.07361 0.09256 0.01264 0.07379 0.065 OOSB2 0.07680 0.06795 0.06014 0.05323 004710 0.06383 0.0559 004911 0.00300 003779 27 28 20 30 0.11520 0.12512 0.11591 0.10733 0.09930 0.10639 0.09761 0.0095 00215 0.07537 08191 007628 006944 00604 0.05731 0.00631 0.05974 005382 004640 0.04368 0.05252 0.046 0.04157 0.0373 0.01330 0.04165 0.03600 003264 0.02 0.02557 003315 0.02900 002551 002217 0.0196 31 32 009202 008520 0.07809 00305 0.06761 0.06915 006544 005020 0.05339 0.0 005210 004736 004306 003914 0.03550 0.03935 003545 003194 062878 002592 0.02990 0.00661 0.02376 0.02121 0.0101 0.02262 0.02002 0.01772 0.01566 0.013 001722 201510 001325 00110 001019 14 35 40 CO9100 003164 0.02200 000529 001530 001075 0.00755 45 00133 001372 002069 000913 0.000 0.00410 0.00275 0.00132 50 0.002 0.00 0.00222 GOOSE) 000143 001345 093458 Present Value of $1 at Compound Interest Due Inn Periods Periods 4.0 59 5.5% 0.96154 0.95694 0.95238 0.94787 2 092456 0.91572 0.90703 0.89845 3 0.89900 0.87630 0.86384 0.85161 0.85480 0.83856 0.82270 0.80722 5 0.92193 0.80245 078353 0.76513 6% 0.94340 0.89000 0.80962 0.79209 0.74726 0.93897 0.88166 082785 0.77732 0.72988 0.81630 0.76290 0.71299 6 7 0.79031 0.75992 0.73059 0.70259 067556 0.76790 0.73483 0.70319 067290 0.64393 0.74622 07106 0.67684 0.64461 0.61391 0.72525 0.68744 0.65160 0.61763 0.58543 0.70496 0.66506 062741 059190 0.55839 0.68533 066351 0.60423 056735 0.53273 0.66634 0.62275 0.58201 054393 0.50835 9 10 11 12 13 14 15 0.64958 0.62460 0.60052 0.57748 0.55526 0,61620 050966 0.56427 0.53997 0.51672 058468 0.55684 0.53032 0.50507 0.48102 0.55491 052598 049856 047257 044793 0.52679 0.49697 0.46884 0.44230 0.41722 0:50021 0.46268 0.44102 0.41410 038883 0.47500 0.44401 0.41496 0.38782 0.36245 16 17 18 19 20 0.59391 0.51337 0.49363 0.47464 0.45639 0.49447 047318 045280 0.43330 041464 045811 0.43630 041552 0.19573 0.37689 042458 040245 0.38147 0.36158 034223 0.39365 037136 035034 013051 031180 0.36510 034281 0.32189 030224 0.28380 033873 0.31657 0.29586 0.27651 0.25842 21 22 23 24 25 043883 0.42196 0.40573 0.39012 0.37512 039679 037970 0.36335 0.34720 0.33273 0.15094 0.34185 0.32557 031007 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 0.24151 0.22571 0.21095 0.19715 0.18425 26 27 20 29 30 0.36069 0.34682 0.33348 0.32005 0.0832 0.31840 0.30460 0.29157 0.27902 026700 0.28124 026785 0.25509 0.24295 0.27138 0.24856 0.23560 0.22332 0.21168 0.2004 0-21981 0.20737 0.1956) 0.13456 0.17411 0.19450 0.18763 0.17140 0.16101 0.15119 0.17220 0.16093 0.15040 0.14056 013137 hs 31 32 0.29646 0.28506 0.27409 0.26355 0.25342 0.25550 0.24450 0.23397 0.22390 021425 0.22036 0.29987 0.19987 0.19035 0.18129 0.19018 0.18027 0.17087 0.16196 0.15352 0.16425 0.15496 0.14619 0.13791 0.13011 0.14196 0.13329 0.12516 0.11752 0.11035 0.12277 0.11474 0.10723 0.10022 0.09366 34 35 40 020820 0.17191 0.14205 0,11746 0.09722 0.00054 0.06678 45 0.12120 0.13790 0.11130 0.089858 0.07205 0.05879 0.01761 50 0.14071 0.11071 0.00720 0.06877 0.05429 0.04291 003395 11 121 13 Present Value of Ordinary Annuity of S1 per Period Periods 99 10 1 0.92593 0.91743 0.90909 2 1.78326 1.75911 1.73554 2 2.57710 2.53129 248605 4 31213 1.23072 3.1897 5 3.99271 3.88965 3.79079 0.900 1.71252 244371 3.10245 3.69590 0.8920 1.6.2005 240183 3.03735 3.60478 0.15496 10 2.36115 2.97447 151723 0.87719 164666 2.32163 2.91371 3A1300 6 7 8 9 10 4.622 5.20637 5.74664 6.24689 671008 448592 5.03295 5.5342 5.99525 641766 435526 4.1842 5.33493 5.75902 614457 423054 471220 5.14612 5.5370S 5.82923 4.11141 456376 4.96764 532825 565022 299755 442261 4.79677 513166 542624 4230 4636 494637 S21612 11 12 13 14 15 7.158 7.53600 790370 8.22424 3.5540 6.30519 7.16073 748690 7.15 6.49506 6.81.169 7.10336 7.469 26000 620652 649236 6.74987 69107 7.1807 5.93770 6.1943 642355 6,62017 681006 5694 5.91765 612181 630249 5A5273 5.66029 5.84216 6.00207 900 3.85137 9.12164 16 17 18 19 20 031256 11.54363 1.75563 95011 9.12855 737916 754079 7.70162 783929 7.86333 7.82371 0.02155 8.20141 36492 0151356 6.9739 7.1146 724967 7.3657 7A1144 6.50 6.72.900 6.89991 693797 7.02475 6.26.505 637206 6.46742 655037 662313 9.37109 9.6060 981815 10.01600 1020014 10.37106 1052670 10.67478 9.29224 94641 950021 70661 9.02250 1.77154 11.30322 474 9.07704 SOMO 17574 8.26643 1014 842174 7.56200 YMUS 7.71143 7.78432 7.1314 7.10155 7.16951 722906 7.28280 7.12900 66096 67424 679200 683514 602203 24 25 BOS 26 27 28 29 30 10.00 10.93516 11.05108 11.15641 11.35778 9.9097 10020158 1011613 10.1128 1027165 16 923722 9.30657 9.36961 34000 854700 6.61 3.65011 8.69379 7.89566 7255 7.9012 0.02101 BOSS18 737167 TA0056 744190 7A7009 YA9565 693515 96066 6.10.104 7.00265 9.42691 32 1134900 1143500 115139 115193 11.65457 10 3430 10.40624 10.46444 1051784 10562 9A7901 95230 9564 9.60057 964416 0.76000 M0054 0.62932 0.00499 11159 3.13535 315656 8.17550 7.51626 7.530 7.55602 7.57170 758557 70198 703090 704823 7.0595 7 OPOOS PE 195105 6.24378 7.10504 40 7,63438 11.92461 10.75796 9.77905 7.12322 10.58120 28252 9.36261 12.10540 7.66000 9.00791 45 50 7467524 7.13266 OSTOC 10.96164 904165 1223340 3.91481