O'Halloran Inc. produces and sells outdoor equipment. On July 1, Year 1, O'Halloran Inc. issued $32,000,000 of six-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of $33,546,022. 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 on July 1, Year 1." 2. Journalize the entries to record the following:" a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. 3. Determine the total interest expense for Year 1. 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 5. Compute the price of $33,546,022 received for the bonds by using the tables shown in Present Value Tables. Round to the nearest dollar. "Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1. Refer to the chart of accounts for the exact wording of the account tes CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST REF CREDIT ASSETS LIABLITIES EQUITY 1 2a. Journalize the entry to record the first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Refer to the chart of accounts for the exact wording of the account bitles. CNOW journals do not use lines for journal explanations. Every line on a joumal page is used for debit or credit entries CNOW journals will automatically indent a credit entry when a credit amount is entered. Round to the nearest dollar. DATE DESCRIPTION JOURNAL PAGE 10 ACCOUNTING EQUATION POST REF DEST CREDIT ASSETS LABUTIES EQUITY 2b. Joumalize the entry to record the interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Round to the nearest dollar. DATE DESCRIPTION 1 JOURNAL PAGE 10 ACCOUNTING EQUATION POST REF DEBIT CREDIT ASSETS LIABLITIES EQUITY 3. Determine the total interest expense for Year 1. $ 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? Yes No 5. Compute the price of $33,546,022 received for the bonds by using the tables shown in Present Value Tables. Round to the nearest dollar. Present value of the face amount $ 1 Present value of the semiannual interest payments 2 Price received for the bonds $ 3