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On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $36,000,000 of 20-year, 11% bonds at a market (effective) interest rate of 14%,

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On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $36,000,000 of 20-year, 11% bonds at a market (effective) interest rate of 14%, receiving cash of $28,802,160. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 20Y1 July 1 111 111 Line 1 Choices: Line 2 Choices: Line 3 Choices: Accounts Payable Accounts Payable Bonds Payable Bonds Payable Bonds Payable Cash Cash Discount on Bonds Payable Discount on Bonds Payable Interest Expense Interest Expense Interest Expense Interest Payable Interest Payable Interest Payable Premium on Bonds Payable Premium on Bonds Payable Premium on Bonds Payable 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the interest method. Round to the nearest dollar. 20Y1 Dec. 31 111 110 Line 3 Choices: Line 2 Choices: Line 1 Choices: Accounts Payable Accounts Payable Bonds Payable Bonds Payable Bonds Payable Cash Cash Discount on Bonds Payable Discount on Bonds Payable Interest Expense Interest Expense Interest Expense Interest Payable Interest Payable Interest Payable Premium on Bonds Payable Premium on Bonds Payable Premium on Bonds Payable b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the interest method. Round to the nearest dollar. 20Y2 June 30 111 lll Line 3 Choices: Line 2 Choices: Line 1 Choices: Accounts Payable Accounts Payable Bonds Payable Bonds Payable Bonds Payable Cash Cash Discount on Bonds Payable Discount on Bonds Payable Interest Expense Interest Expense Interest Expense Interest Payable Interest Payable Interest Payable Premium on Bonds Payable Premium on Bonds Payable Premium on Bonds Payable 3. Determine the total interest expense for 20Y1. Round to the nearest dollar. $

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