Compute Bond Proceeds, Amortizing Premium by Interest Method, and Interest Expense Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware Co. issued $30,000,000 of five-year, 13% bonds at a market (effective) interest rate of 11%, with interest payable semiannually. Compute the following: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit 8 and Exhibit 10. Round to the nearest dollar. b. The amount of premium to be amortized for the first semiannual interest payment period, using the interest method. Round to the nearest dollar. c. The amount of premium to be amortized for the second semiannual interest payment period, using the interest method. Round to the nearest dollar. $ d. The amount of the bond interest expense for the first year. Round to the nearest dollar. Present Value of $1 at Compound Interest EXHIBIT 8 5% Periods 1 4% 0.96154 0.92456 0.88900 0.85480 12% 0.89286 0.79719 0.71178 w N 4 5 6 7 8 9 472% 0.95694 0.91573 0.87630 0.83856 0.80245 0.76790 0.73483 0.70319 0.67290 0.64393 0.82193 0.79031 0.75992 0.73069 0.70259 0.67556 0.95238 0.90703 0.86384 0.82270 0.78353 0.74622 0.71068 0.67684 0.64461 0.61391 572% 0.94787 0.89845 0.85161 0.80722 0.76513 0.72525 0.68744 0.65160 0.61763 0.58543 6% 0.94340 0.89000 0.83962 0.79209 0.74726 0.70496 0.66506 0.62741 0.59190 0.55839 67% 0.93897 0.88166 0.82785 0.77732 0.72988 0.68533 0.64351 0.60423 0.56735 0.53273 7% 0.93458 0.87344 0.81630 0.76290 0.71299 0.66634 0.62275 0.58201 0.54393 0.50835 10% 0.90909 0.82645 0.75131 0.68301 0.62092 0.56447 0.51316 0.46651 0.42410 0.38554 11% 0.90090 0.81162 0.73119 0.65873 0.59345 0.53464 0.48166 0.43393 0.39092 0.35218 13% 0.88496 0.78315 0.69305 0.61332 0.54276 0.48032 0.42506 0.37616 0.63552 0.56743 0.50663 0.45235 0.40388 0.36061 0.32197 0.33288 0.29459 10 EXHIBIT 10 Present Value of an Annuity of $1 at Compound Interest Periods 1 2 3 4 5 6 7 8 4% 0.96154 1.88609 2.77509 3.62990 4.45182 5.24214 6.00205 6.73274 7.43533 8.11090 47% 0.95694 1.87267 2.74896 3.58753 4.38998 5.15787 5.89270 6.59589 7.26879 7.91272 5% 0.95238 1.85941 2.72325 3.54595 4.32948 5.07569 5.78637 6.46321 7.10782 7.72173 572% 0.94787 1.84632 2.69793 3.50515 4.27028 4.99553 5.68297 6.33457 6.95220 7.53763 6% 0.94340 1.83339 2.67301 3.46511 4.21236 4.91732 5.58238 6.20979 6.80169 7.36009 672% 0.93897 1.82063 2.64848 3.42580 4.15568 4.84101 5.48452 6.08875 6.65610 7.18883 7% 0.93458 1.80802 2.62432 3.38721 4.10020 4.76654 5.38929 5.97130 6.51523 7.02358 10% 0.90909 1.73554 2.48685 3.16987 3.79079 435526 4.86842 5.33493 5.75902 6.14457 11% 0.90090 1.71252 2.44371 3.10245 3.69590 4.23054 4.71220 5.14612 5.53705 5.88923 12% 0.89286 1.69005 2.40183 3.03735 3.60478 4.11141 4.56376 4.96764 5.32825 5.65022 13% 0.88496 1.66810 2.36115 2.97447 3.51723 3.99755 4.42261 4.79677 5.13166 5.42624 9 10