Inc. issued $110000$ of $7\%,$five$-$year bonds at a price of $89$ on January$31,($Note: When the issue price of bonds is$$ provided, as in this$$ case, you do not need to calculate it$$ yourself; just use the stated$$ price.$).$ The market interest rate at the date of issuance was $10\%,$ and the standard bonds pay interest$$ semi$-$annually Requirement $2.$ Record issuance of the bonds on January$31,,$ and payment of the first$$ semi$-$annual interest amount and amortization of the bonds on July$31,.$Requirement $3.$ How much cash did borrow on January$31,?$ How much cash will pay back at maturity on January$31,?$Amount of cash Supreme Autoparts borrowed on January $31,20$X$1$

Amount of cash Supreme Autoparts will pay back on January $31,20$X$6$: equirement $4.$ How much cash interest will pay each six$$ months?

Amount of cash interest Supreme Autoparts will pay each six months:

Part $6$

Requirement $5.$ How much interest expense will report on July$31,,$ and on January$31,?$ Why does the amount of interest expense increase each$$ period? Explain in detail.

In this$$ step, enter the interest expense amounts will report on July$31,,$ and on January$31,.$ Interest expense Supreme Autoparts will report on July $31,20$X$1$:

Interest expense Supreme Autoparts will report on January $31,20$X$2$:

Part $7$

Why does the amount of interest expense increase each$$ period?

Interest expense increases because the

as the bonds move toward$$ maturity, and the

must be amortized over the life of the bond. The

bond carrying amount produces

amount of interest expense each period