Boyd Co$.$ produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $$87,000,000$ of $5-$year, $11\%$ bonds at a market $($effective$)$ interest rate of $13\%,$ with interest payable semiannually. DATA

Face amount of bonds $$87,000,000$

Contract rate of interest $11\%$

Term of bonds, years $5$

Market rate of interest $13\%$

Interest payment Semiannual a$.$ Compute the amount of cash proceeds from the sale of the bonds.

b$.$ Compute the amount of discount to be amortized for the first semiannual interest payment period, using the interest method.

c$.$ Compute the amount of discount to be amortized for the second semiannual interest payment period, using the interest method.

d$.$ Compute the amount of the bond interest expense for the first year.

Using formulas and cell references from the problem data, perform the required analysis. Formulas entered in the green cells show in the orange cells. Transfer amounts to CNOWv$2$ for grading.

Amount Formulas

a$.$ PV of cash proceeds

b$.$ Discount amortized for the $1$st interest payment period

c$.$ Discount amortized for the $2$nd interest payment period

d$.$ Interest expense for the $1$st year