On 1/1/2001, General Machine Co. issued $1,000,000 10-year bonds with a market rate (i.e., yield) of 10%. The coupon rate is 12%. Interests are paid annually on 12/31. Answer the following questions assuming that the company uses the effective interest rate method of amortization. Show your calculations. (You may submit your Excel spreadsheet directly to Blackboard.) A. 1. Determine the selling price of the bond on the issue date. Is it issued at a premium or discount? 2. Provide the journal entries to record the bond issuance above. 3. Prepare the bond amortization table using the effective interest method. (You may have some rounding errors if you use the present value tables instead of a finance calculator or the built-in Excel function, which is perfectly fine.) 4. What is the interest expense for General Machine in the fiscal year that ended 12/31/2001? Provide the journal entries to record the interest expense. 5. What is the net borrowing (i.e., net book value of bond) of General Machine as of 12/31/2001 after making the first coupon payment? 6. On 1/1/2003, General Machine found itself with excess cash and it will be best for them to buy back their bonds from the open market and retire them so as to avoid future interest payments. The market interest rate on 1/1/2003 is 11%. Calculate: (i) the cash amount that General Machine has to pay to retire the bond (ii) the book value (i.e., net borrowing) of the bonds on 1/1/2003 (iii) gain/loss from the retirement (iv) provide the journal entries for the early retirement of bonds.