Chart of Accounts Journal Final Questions On January 1.the first day of its fiscal year, Pretender Company issued $18,500.000 0 interest rate of 12%, resulting in Pretender Company recenng cash of $17.138,298 of frve year 10% bonds o finance its operations of producing and selling home improvement products interest is payable sem ann Required: A Journalize the entries to record the folowing (refer to he Chart of Accounts for exact wording of accountiles) 1. Issuance of the bonds 2 First semiannual interest payment. The bond discount is combined with the serniannual interest payment (Round nearest doilar) 3. Second semiannual interest payment The bond discount is combined with the sermiannual interest payment (Round your answer to the nearest dollar) B. Determine the amount ot the bond interest expense for the first year C. Explain why the company was abie to issue the bonds for only $17,138,298 rather than for the face amount of 518 500,000 Chart of Accounts US3 Repairs expeise 534 Selling Expenses 535 Rent Expense 536 Insurance Expense 537 Ofice 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 93 Accumuiated Deprecaion-Store Equipment 194 Office Equipment 195 Accumulated Deprecation-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 EQUITY 311 Common Stock 312 PaidHn Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Prefermed Stock 331 Paid-In Capital from Sale of Treasury Stocik 340 Retained Earnings 351 Cash DiMdends 352 Stock Oividends 390 Income Summary Instructions Chart of Accounts JournalFinal Questions Journal A Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles PAGE 10 JOURNAL DATE DESCRIPTION POST. REF DEBIT CREDIT rakesignmen Sesin nLocator- igiunvoker- assignmentsatak assignment-take&inQ Search in Book Show Me How Calculator Entries for issuing bonds and amortizing discount by straight-line method Chart of ccounts Journal Final Questions rt of Determine the amount of the bond interest expense for the first year C. Explain why the company was able to issue the bonds for only $17,138 298 rather The bonds sell for less than their tace amount because the market rate of interest is on similar bonds (market rate) than for the face amount of $18,500,000 the contract rate of interest Investors wiling to pay the fulf face amount for bonds that pay a lower contract rate of interest man the rate they could eam