Number of bonds 2,500 Par value per bond $ 1,200 Bonds are dated 1/1/X1 Bonds are issued 1/1/X1 Years to maturity 5 Stated interest rate 6% Effective Interest rate 8% Interest is paid on July 1 Interest is paid on Jan. 1 *Use the tables provided in the Chapter 14 folder of the Files tab in Canvas for your PV Factors 2. Will this bond be sold at a premium, discount, or for par value? A. Premium 3. Discount C. Par Value 3. What is the initial value (issuance price) of the bonds? 4. What is the journal entry for the 7/1/X1 interest payment? A. Debit Bond Interest Expense for $69,734, Debit Premium on Bonds Payable for $20,266, and Credit Cash for $90,000 3. Debit Bond Interest Expense for $90,000 and Credit Cash for $90,000 C. Debit Bond Interest Expense for $110,266, Credit Discount on Bonds Payable for $20,266, and Credit Cash for $90,000 . Debit Bond Interest Expense for $220,834, Credit Discount on Bonds Payable for $40,834, and Credit Cash for $180,000 5. What is the journal entry required at the balance sheet date for interest accrued and the amortization of the bond discount or premium at December 31, 20x1? A. Debit Bond Interest Expense for $68,923, Debit Premium on Bonds Payable for $21,077, and Credit Bond Interest Expense Payable for $90,000 B. Debit Bond Interest Expense for $111,077, Credit Discount on Bonds Payable for $21,077, and Credit Bond Interest Expense Payable for $90,000 C. Debit Bond Interest Expense for $68,923, Debit Premium on Bonds Payable for $21,077, and Credit Cash for $90,000 2. Debit Bond Interest Expense for $111,077, Credit Discount on Bonds Payable for $21,077, and Credit Cash for $90,000 6. Assume the additional following information about R&R exercising a call option on these bonds (see Question #2). What would be the resulting gain on early extinguishment of debt, loss on early extinguishment of debt, or neither a gain or loss? Enter the value as a positive for a gain, negative for a loss, or zero for neither a gain or loss. Do not use any symbols. Call Option % Date Called: Unamortized Discount at Call Date 105% 1/1/X2 $ 201,995