Campbell Inc. produces and sells outdoor equipment. On July 1, 20Y1, Campbell issued $87,000,000 of 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $92,658,219. 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. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.* 2. 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.) 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.) 3. Determine the total interest expense for 20Y1. 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? 5. Compute the price of $92,658,219 received for the bonds by using the present value tables. (Round to the nearest dollar.) *Refer to the Chart of Accounts for exact wording of account titles. Two present value tables are provided: Present Value of $1 at Compound Interest Due in n Periods and Present Value of Ordinary Annuity of $1 per Period. Use them as directed in the problem requirements. Present Value of $1 at Compound Interest Due in n Periods 4.0% 4.5% 5% 5.5% 6% 6.5% Periods 5 7 8 0.96154 0.92456 0.88900 0.85480 0.82193 0.79031 0.75992 0.73069 0.70259 0.67556 .64958 0.62460 0.60057 0.57748 0.95694 0.91573 0.87630 0.83856 0.80245 0.76790 0.73483 0.70319 0.67290 0.64393 0.61620 0.58966 0.56427 0.53997 0.95238 0.90703 0.86384 0.82270 0.78353 0.74622 0.71068 0.67684 0.64461 0.61391 0.58468 0.55684 0.53032 0.50507 0.94787 0.89845 0.85161 0.80722 0.76513 0.72525 0.68744 0.65160 0.61763 0.58543 0.55491 0.52598 0.49856 0.47257 0.94340 0.93897 0.890000.88166 0.83962 0.82785 0.79209 0.77732 0.74726 0.72988 0.70496 0.68533 0.66506 0.64351 0.62741 0.60423 0.59190 0.56735 0.55839 0.53273 0.526790.50021 0.49697 0.46968 0.46884 0.44102 0.44230 0.41410 7% 0.93458 0.87344 0.81630 0.76290 0.71299 0.66634 0.62275 0.58201 0.54393 0.50835 0.47509 0.44401 0.41496 0.38782 110 13 18 0.5526 0.51672 0.48102 0.44793 0.41727 0.53391 0.49447 0.45811 0.42458 0.39365 0.51337 0.47318 0.43630 0.40245 0.37136 0.49363 0.45280 0.41552 0.38147 0.35034 0.47464 0.43330 0.39573 0.36158 0.33051 0.45639 0.41464 0.37689 0.34273 0.31180 0.43883 0.39679 0.35894 0.32486 0.29416 | 0.42196 0.37970 0.34185 0.30793 0.27751 0.40573 0.36335 0.32557 0.29187 0.26180 0.39012 0.34770 0.31007 0.27666 0.24698 0.37512 0.33273 0.29530 0.26223 0.23300 10.36069 0.31840 0.28124 0.24856 0.21981 0.34682 0.30469 0.26785 0.23560 0.20737 0.33348 0.29157 0.25509 0.22332 0.19563 0.32065 0.27902 0.24295 0.21168 0.18456 0.30832 0.26700 0.23138 0.20064 0.17411 0.29646 0.25550 0.22036 0.19018 0.16425 0.28506 0.24450 0.20987 0.18027 0.15496 0.27409 0.23397 0.19987 0.17087 0.14619 0.3883 0.36510 0.34281 0.32189 0.30224 0.28380 0.26648 0.25021 0.23494 0.22060 0.20714 0.19450 0.18263 0.17148 0.16101 0.15119 0.14196 0.13329 0.12516 0.36245 0.33873 0.31657 0.29586 0.27651 0.25842 0.24151 0.22571 0.21095 0.19715 0.18425 0.17220 0.16093 0.15040 0.14056 0.13137 0.12277 0.11474 0.10723 30 12 15 16 9.38507 9.98565 10.56312 11.11839 11.65230 12.16567 12.65930 13.13394 | 13.59033 14.02916 14.45112 | 14.85684 15.24696 15.62208 15.98277 | 16.32959 16.66306 | 16.98371 17.29203 9.11858 9.68285 10.22283 10.73955 11.23402 11.70719 12.15999 12.59329 13.00794 13.40472 13.78442 14.1477 14.49548 14.82821 15.14661 15.45130 15.74287 16.02189 16.28889 8.86325 9.39357 9.89864 10.37966 10.83777 11.27407 11.68959 12.08532 12.46221 12.82115 13.16300 13.48857 13.79864 14.09394 14.37519 14.64303 14.89813 15.14107 15.37245 8.61852 8.38384 8.15873 7.94269 9.11708 8.85268 8.59974 8.35765 | 9.58965 | 9.29498 19.01384 8.74547 10.03758 9.71225 9.40267 9.10791 10.46216 10.10590 9.76776 9.44665 10.86461 10.47726 10.11058 9.76322 11.24607 10.82760 10.43247 10.05909 11.60765 11.15812 10.73471 10.33560 11.95038 11.46992 11.01851 10.59401 12.27524 11.76408 11.28498 10.83553 12.58317 12.04158 11.53520 11.06124 12.87504 12.30338 11.77014 11.27219 13.15170 12.55036 11.99074 11.46933 13.41393 12.78336 12.19788 11.65358 13.66250 13.00317 12.39237 11.82578 13.89810 13.21053 12.57500 11.98671 14.12142 13.40616 12.74648 12.13711 14.33310 13.59072 12.90749 12.27767 14.53375 13.76483 13.05868 12.40904 31 34 35 17.58849 17.87355 18.14765 18.41120 18.66461 19.79277 20.72004 21.48218 16.54439 15.59281 16.78889 15.80268 17.02286 16.00255 17.24676 16.19290 17.46101 16.37419 18.40158 17.15909 19.15635 17.77407 19.76201 18.25593 14.72393 13.92909 14.90420 14.08404 15.07507 14.23023 15.23703 14.36814 15.39055 14.49825 16.04612 15.04630 16.54773 15.45583 16.93152 15.76186 13.20063 13.33393 13.45909 13.57661 13.68696 14.14553 14.48023 14.72452 12.53181 12.64656 12.75379 12.85401 12.94767 13.33171 13.60552 13.80075 CHART OF ACCOUNTS Campbell Inc. General Ledger ASSETS REVENUE 110 Cash 111 Petty Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 410 Sales 610 Interest Revenue 611 Gain on Redemption of Bonds EXPENSES 126 Interest Receivable 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies 142 Store Supplies 151 Prepaid Insurance 510 Cost of Merchandise Sold 515 Credit Card Expense 516 Cash Short and Over 521 Sales Salaries Expense 522 Office Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Repairs Expense 191 Land 192 Store Equipment 193 Accumulated Depreciation Store Equipment 194 Office Equipment 534 Selling Expenses 535 Rent Expense 195 Accumulated Depreciation Office Equipment LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232 Interest Payable 241 Notes Payable 251 Bonds Payable 252 Discount on Bonds Payable 253 Premium on Bonds Payable 536 Insurance Expense 537 Office Supplies Expense 538 Store Supplies Expense 541 Bad Debt Expense 561 Depreciation Expense-Store Equipment 562 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 710 Interest Expense 711 Loss on Redemption of Bonds EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends 1. and 2. Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles. Round to the nearest dollar. PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY PAGE 11 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 3. Determine the total interest expense for 20Y1. Enter amount as a positive number. $ 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 O No 5. Compute the price of $92,658,219 received for the bonds by using the 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