On January 1, 2016, Drennen, Inc., issued $4.6 million face amount of 7-year, 14% stated rate bonds when market interest rates were 12%. The bonds pay semiannual interest each June 30 and December 31 and mature on December 31, 2022. Table 6-4, Table 6-5

a. Calculate the proceeds (issue price) of Drennen, Inc.'s, bonds on January 1, 2016, assuming that the bonds were sold to provide a market rate of return to the investor. (Round PV factor to 4 decimal places.)

a) Procceds =

b-1. Assume instead that the proceeds were $4,559,000. Use the horizontal model to record the payment of semiannual interest and the related discount amortization on June 30, 2016, assuming that the discount of $41,000 is amortized on a straight-line basis.

Balance sheet
Assets	Liabilities	stockholder equity
Cash =	discounts on bonds payable =

income statement
net income	revenues	expenses
		interest expenses =

b-2. Assume instead that the proceeds were $4,559,000. Record the journal entry to show the payment of semiannual interest and the related discount amortization on June 30, 2016, assuming that the discount of $41,000 is amortized on a straight-line basis.

Event	General jornal	Debit	Credit
1	interest expense
	cash
	discount on bonds payable