Instructions Campbell, Inc. produces and sells outdoor equipment On July 1 Year 1. Campbell, Inc. issued $25,000,000 of 10 year, 10% bonds at a market effective) interest rate of 9%, receiving cash of $26,625,925. 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 interese payment on December 31, Year 1, and the amortization of the bond premium using the interest method (Round to the nearest dollar) b. The interest payment on June 30, Year 2 and the amortization of the bond premium, 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 CHART OF ACCOUNTS Campbell, Inc. General Ledger ASSETS 110 Cash REVENUE 410 Sales 111 Petty Cash 121 Accounts Receivable 610 Interest Revenue 611 Gain on Redemption of Bonds 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies 142 Store Supplies 151 Prepaid Insurance 191 Land 192 Store Equipment 193 Accumulated Depreciation Store Equipment 194 Office Equipment 195 Accumulated Depreciation Office Equipment EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 516 Cash Short and Over 521 Sales Salaries Expense 522 Office Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Repairs Expense 534 Seling Expenses 535 Rent Expense 536 Insurance Expense 537 Office Supplies Expense 538 Store Supplies Expense 541 Bad Debt Expense 561 Depreciation Expense-Store Equipment 562 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 710 Interest Expense LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 232 Interest Payable 241 Notes Payable 251 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 1 Journalte the entry to record the amount of cash proceeds from the issuance of the bonds. Refer to the Chart of Accounts for exact wording of account PAGE 10 JOURNAL ACCOUNTING EQUATION DESCRIPTION POST. ROE D EBIT CREDIT ASSETS LABUTES QUITY 20 Journaize the entry to record the first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium using the interest method (Round to the nearest doar Refer to the Chart of Accounts for exact wording of accounts PAGE 10 JOURNAL ACCOUNTING EQUATION DESCRIPTION CREDIT 20 Journace the entry to record the interest payment on June 30 Year 2 and the amortization of the bond Chart of Accounts for exact wording of accounts i ng the interest method (Round to the nearest r efer to the PAGE 10 ACCOUNTING EQUATION POST RE D ESIT Final Question 3. Determine the total interest expense for Yearts
