Favreau Corporation wholesales repair products to equipment manutacturees. On April 1, Year 1, Favreat Copporation issued 523,100,000 of five-year, 9% bonds at a makket (eflective interest rate of 8%, receiving cash of $24,036,717. Interest is payable sernianually on Apnt 1 and October 1 Required: a. Jownakie the entries to mecond the following Refer to the chwt of accounts for the exact wovding of itse account atien CNOWjournals do not use ines for jowmal emplanations tivery kine on a joumal page is ised for dobit or creck entriet CNOWF foemals wit automatisaly indent a credit entry when a eredit amourt is entered. 1. Issuance of bands on Ap=1 2. Fiest interest paymers on Ccfober 1 and amcrtzation of bond premium for soc monthe using the straght une method The bond premum? amortization is combined wet the beminnncai intereat paymert (Round to the nearest dollar) b. Explain why the company was able to dasce the bonds for $24,035,717 mather than for the face amount or 529,100,000 Instructions Chart of Accounts Journal Final Question Chart of Accounts CHART OF ACCOUNIS Favreau Corporation General Ledger ASSETS 110 Gash 111 Petty Cash 121 Accounts Recetvable 122 Allowance for Doubthul Accounts 126 Interest Receivable 127 Notes Receivabie 131 Merchandise Inventory 141 Office Supplies 142 Store Supples 151 Prepaid Insurance 191 Land 192 store Equ oment REVENUE 410 Sales 610 Interest Revenue 611 Gain on Redemption of Bonds EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 516 Cash Short and Over 521 Sales Salaries Expense 522 Otfice Salaries Expense 531 Advertising Expense 532. Delvery Expense Chart of Accounts 191Land 192 Store Equipment 193 Accumutated Depreciation-Store Equipment 194 Oftice Equipment 195 Accumulated Depreciation Ofice Equipment LABIITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232. Interest Payable 241 Notes Payable 251 Bonds Payable 252 Discount on flonds Payable 253 Premiam on Bonds Payable 531 Advertising Experse 532 Delivery Expense 533 Repairs Expense 534 Selling Expenses 535 Rent Expense 536 Insurance Expense 537 Office Supplies Expense 53s Store Supplies Expense 541 Bad Debt Expense 561 Depreciation Expense-Store Equipment 562 Depreciation Expense-Otice 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 Eamings 351 Cash Dividends 352 Stock Dividends a Joumalize the entries. Reler to the chart of accounts for the exact wording of the account thies. CNOWjoumals do not use lines for journs explanations Every lye on ajoumal a is used for debit or credit entres. CNOW joumals wi outomaticaly inolent a crodit entry when a crodit amount it entered B. Explain why the company was abve to issue the bonds for 524,036,717 nather than for the fact aniount or 523, foo, 000 . The bonds sell for more ihan theis face arnount because the market fate of interest in the contract rate of interest investor willing to gay mave las bonds that pay a higher rate of interest (contratt rate) than the rate they coudd eain market rate) Favreau Corporation wholesales repair products to equipment manutacturees. On April 1, Year 1, Favreat Copporation issued 523,100,000 of five-year, 9% bonds at a makket (eflective interest rate of 8%, receiving cash of $24,036,717. Interest is payable sernianually on Apnt 1 and October 1 Required: a. Jownakie the entries to mecond the following Refer to the chwt of accounts for the exact wovding of itse account atien CNOWjournals do not use ines for jowmal emplanations tivery kine on a joumal page is ised for dobit or creck entriet CNOWF foemals wit automatisaly indent a credit entry when a eredit amourt is entered. 1. Issuance of bands on Ap=1 2. Fiest interest paymers on Ccfober 1 and amcrtzation of bond premium for soc monthe using the straght une method The bond premum? amortization is combined wet the beminnncai intereat paymert (Round to the nearest dollar) b. Explain why the company was able to dasce the bonds for $24,035,717 mather than for the face amount or 529,100,000 Instructions Chart of Accounts Journal Final Question Chart of Accounts CHART OF ACCOUNIS Favreau Corporation General Ledger ASSETS 110 Gash 111 Petty Cash 121 Accounts Recetvable 122 Allowance for Doubthul Accounts 126 Interest Receivable 127 Notes Receivabie 131 Merchandise Inventory 141 Office Supplies 142 Store Supples 151 Prepaid Insurance 191 Land 192 store Equ oment REVENUE 410 Sales 610 Interest Revenue 611 Gain on Redemption of Bonds EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 516 Cash Short and Over 521 Sales Salaries Expense 522 Otfice Salaries Expense 531 Advertising Expense 532. Delvery Expense Chart of Accounts 191Land 192 Store Equipment 193 Accumutated Depreciation-Store Equipment 194 Oftice Equipment 195 Accumulated Depreciation Ofice Equipment LABIITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232. Interest Payable 241 Notes Payable 251 Bonds Payable 252 Discount on flonds Payable 253 Premiam on Bonds Payable 531 Advertising Experse 532 Delivery Expense 533 Repairs Expense 534 Selling Expenses 535 Rent Expense 536 Insurance Expense 537 Office Supplies Expense 53s Store Supplies Expense 541 Bad Debt Expense 561 Depreciation Expense-Store Equipment 562 Depreciation Expense-Otice 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 Eamings 351 Cash Dividends 352 Stock Dividends a Joumalize the entries. Reler to the chart of accounts for the exact wording of the account thies. CNOWjoumals do not use lines for journs explanations Every lye on ajoumal a is used for debit or credit entres. CNOW joumals wi outomaticaly inolent a crodit entry when a crodit amount it entered B. Explain why the company was abve to issue the bonds for 524,036,717 nather than for the fact aniount or 523, foo, 000 . The bonds sell for more ihan theis face arnount because the market fate of interest in the contract rate of interest investor willing to gay mave las bonds that pay a higher rate of interest (contratt rate) than the rate they coudd eain market rate)