On August 1, 2006, Tower, Inc. issued 2,500 of its $1,000 face value, 8%, 6-year bonds dated August 1, 2006. The bonds require semi-annually coupon payments to be made on January 31 and July 31 of each year, with the first coupon payment due on January 31, 2007. Market interest rate of the bond is 7.8%. Tower, Inc.'s fiscal year ends on July 31 each year. Bond issue costs of $12,000 were paid on August 1, 2006. Requirement

1: Prepare the journal entry or entries that Tower would make on August 1, 2006 when it issued these bonds. ( please explain how did you get this numbers).

: How much interest expense will Tower recognize over the life of these bonds?

Requirement 3:

Prepare the journal entry or entries that Tower would make on January 31, 2007 related to these bonds.

Requirement 4: Determine the following financial statement items.

7/31/08 Bonds payable (carrying value) = _________________

Interest expense for fiscal year ended 7/31/08 = _____________