Bond premium, entries for bonds payable transactions

Rodgers Gridiron Co$.$ produces and sells football equipment. On July $1,20Y1,$ Rodgers issued $$53,800,000$ of $10$ year, $14\%$ bonds at a market $($effective$)$ interest rate of $13\%,$ receiving cash of $$56,764,149.$ 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.

Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July $1,20$Y$1.$

$20$ Y$1$ July $1$

Premium on Bonds Payable grad

Bonds Payable grad$$

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Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account.

Journalize the entries to record the following:

a$.$ The first semiannual interest payment on December $31,20Y1,$ and the amortization of the bond premium, using the straight$-$line method. Round to the nearest dollar.

$20Y1$ Dec. $31$

Premium on Bonds Payable $$

Cash $vv$

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The straight$-$line method of amortization provides equal amounts of amortization over the life of the bond.

b$.$ The interest payment on June $30,20Y2,$ and the amortization of the bond premium, using the straight$-$line method. Round to the nearest dollar.

$20Y2$ June $30$

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The straight$-$line method of amortization provides equal amounts of amortization over the life of the bond.

$3.$ Determine the total interest expense for $20$Y$1.$ Round to the nearest dollar.

$7,504,000$

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?

Compute the price of $$56,764,149$ 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