Bond premium, entries for bonds payable transactions Rodgers Corporation produces and sells football equipment. On July 1, 2011, Rodgers issued $32,600,000 of 10-year, 14% bonds at a market (effective) interest rate of 12%, receiving cash of $36,339,037. 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. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 2011. 2011 July 1 Cash Premium on Bonds Payable Bonds Payable 36,339,037 3,739,037 32,600,000 Alpha-numeric input field Feedba Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 2011, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. 2011 Dec. 31 Interest Expense Check My Work 2,180,342 X a. The first semiannual interest payment on December 31, 2011, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. 2011 Dec. 31 Interest Expense Feedback 2,180342 X Premium on Bonds Payable Cash 2,180,342 X 2,282,000 Check My Work The straight-line method of amortization provides equal amounts of amortization over the life of the bond. b. The interest payment on June 30, 2012, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. 2012 June 30 Interest Expense Premium on Bonds Payable ash 2,174,243 X 107,757 X 2,282.000 Check My Work The straight-line method of amortization provides equal amounts of amortization over the life of the bond. Check My Work 3. Determine the total interest expense for 20Y1. Round to the nearest dollar. 2,180,342 X 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? Yes 5. Compute the price of $36,339,037 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 Present value of the face amount Present value of the semi-annual interest payments Proceeds of bond issue Feedback Check My Work 10,164,680 114,699 X 36,338,992 X Calculate the present value of the face amount of the bonds by using the the Present Value of $1 table. Calculate the present value of the semiannual interest payments by using the Present Value of an Annuity of $1 table. Check My Work Partially correct Check My Work