eBook Print Item Bond discount, entries for bonds payable transactions, interest method of amortizing bond discount Instructions Chart of Accounts Joumal Final Question Instructions On July 1, Year 1, Danzer Industries Inc. issued $40,000,000 of 10-year, 7% bonds at a market (effective) interest rate of 8%, receiving cash of S37 282 062. 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 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount, using the interest method. (Round to the nearest dollar.) b. The interest payment on June 30, Year 2, and the amortization of the bond discount using the interest method (Round to the nearest dollar.) 3. Determine the total interest expense for Year 1 *Refer to the Chart of Accounts for exact wording of account titles. CUIS Chart of Accounts CHART OF ACCOUNTS Danzer Industries Inc. General Ledger ASSETS REVENUE 110 Cash 410 Sales 111 Petty Cash 610 Interest Revenue 121 Accounts Receivable 611 Gain on Redemption of Bonds 122 Allowance for Doubtful Accounts 126 Interest Receivable EXPENSES 127 Notes Receivable 510 Cost of Merchandise Sold 131 Merchandise Inventory 515 Credit Card Expense 516 Cash Short and Over 141 Office Supplies 521 Sales Salaries Expense 142 Store Supplies 522 Office Salaries Expense 151 Prepaid Insurance 531 Advertising Expense 191 Land 532 Delivery Expense 192 Store Equipment 193 Accumulated Depreciation Store Equipment 533 Repairs Expense 534 Selling Expenses 194 Office Equipment 535 Rent Expense 195 Accumulated Depreciation Office Equipment 536 Insurance Expense LIABILITIES 537 Office Supplies Expense 210 Accounts Payable 538 Store Supplies Expense 541 Bad Debt Expense 221 Salaries Payable Check My Work Book Print Item Chart of Accounts 154 UNILE Lyupnem ut JCITY LAPURO 195 Accumulated Depreciation Office Equipment 535 Rent Expense 536 Insurance Expense LIABILITIES 537 Office Supplies Expense 210 Accounts Payable 538 Store Supplies Expense 221 Salaries Payable 541 Bad Debt Expense 231 Sales Tax Payable 561 Depreciation Expense-Store Equipment 232 Interest Payable 562 Depreciation Expense-Office Equipment 241 Notes Payable 590 Miscellaneous Expense 251 Bonds Payable 710 Interest Expense 252 Discount on Bonds Payable 711 Loss on Redemption of Bonds 253 Premium on Bonds Payable 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 390 Income Summary Check My Work Journal 1. and 2. Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 4 5 6 PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 3 terest method of amortizing bond discount Instructions Chart of Accounts Journal Final Question Final Question X 3. Determine the total interest expense for Year 1. $