Kawa Inc. issued $6,000,000 face value of 3.5% bonds on July 1^st, 2020. Additional information on the bond issue is as follows:

Bond Date July 1^st, 2020

Maturity Date July 1^st, 2030

Yield rate 4%

Interest payment dates June 30^th and December 31^st

Bond discount/premium amortization Effective Interest Rate Method

Year end December 31^st

Please round all calculations to the nearest dollar.

1. Determine the bond cash proceeds? Calculate the amount of premium/discount, if any. (4 marks)
2. Please record journal entries for the bond issuance on July 1^st and interest payment on December 31^st. (6 marks)
3. On July 1^st, 2026, Kawa redeemed 45% of the bonds outstanding at 98.
   1. Calculate the carrying value of the bond on July 1^st, 2026. (2 marks)
   2. Calculate the amount of cash paid. (2 marks)
   3. Calculate the gain or loss on redemption. (2 marks)
4. Please record the journal entries for the bond redemption on July 1^st and the interest payment on December 31^st, 2026. (10 marks)