ezto.mhed QS 14-2B Effective Interest: Bond computations LO P1, P7 Garcia Company issues 10%, 15-year bonds with a par value of $240,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8%, which implies a selling price of 117 14. The effective interest method is used to allocate interest expense. 1. What are the issuer's cash proceeds from issuance of these bonds? Answer Is complete and correct. 281400 2. What total amount of bond interest expense will be recognized over the life of these bonds? Answer is complete and correct. Total bond interest expense over life of bonds Amount repaid: )payments of Par value at maturity 30 12,0000 S 360,000 Total repayments Less amount borrowed Total bond interest expense 240,000 600,000 (281,400) S 318,600 3. What is the amount of bond interest expense recorded on the first interest payment date? Answer is complete but not entirely correct Bond interest expense 1,380