Campbeline produces and sold outdoor equipment. On July 1. Year 1, Campbelino, nuod $11,300,000 of 10-year, 11% bonds at a market (effective interest rate of 8%,rocolving cash of $12,768,867. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journaitre the entry to record the amount of cash proceeds from the issuance of the bonds on July 1. You 1 2. Journalize the entries to record the following: a. The first semanal interest payment on December 31, Yuvar 1, and the aromation or the bond pronum, cong the straightenemohad. (Round to the nearest dollar) 5. The interest payment on June 30, Yoar 2, and the amortization of the bond premium, using the straight and method. (Hound to the nearest dollar 3. Determine the Rotal interest experise for Your 4. Will the bond proceeds aways be greater than the face amount of the bonds when the contract rato spreader and the market rate of interest? 5. Compute the price of $12,788,087 received for the bonds by using the tables shown in Present Value Tables (Pound to the nearest dotor) "Refer to the Chart of Accounts for of wording of accounts Journal 1. Joumalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1. Refer to the Chart of Accounts for exact wording of account the PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POSTER DOIT CREDIT TOTY 2 21. Journaise the entry to record the first semiannual interest payment on December 31, Year 1, and the amortization of the band promium, using the straight line method. Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account nisters. PAGE 10 ACCOUNTING EQUATION JOURNAL POSER DESCRIPTION DERIT CREDIT LIABILITIES DATE EQUITY 1 2 21. Journaltro the entry to record the interest payment on June 30, Year 2, and the amontiration of the bond premium using the straight toe method Hound to the nearest dolor. Peter to the Chart of Accounts for exact wording of account titles PNG JOURNAL ACCOUNTING EQUATION ALLETS CREDIT LATES QUITY w GAR DESCRIPTION POSER 3. Determine the total interest expense for Year 1. 4. Way 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 No 5. Compute the price of $12,769,867 received for the bonds by using the tables shown in Present Value Tables (Round to the nearest dollar) Present value of the face amount Present value of the semiannual interest payments Price received for the bonds
