Part 1: Accounting for bonds payable On March 1, 2021, Titan Company received proceeds from issuance of its 500, ten-year, 9% bonds. These bonds are dated March 1, 2021, and pay interest semiannually on March 1 and September 1. Even though these bonds are due on March 1, 2031, it is indicated in the bond indenture that Titan Company can settle the liability, partially or in full, by either calling these bonds at 102.5 or by acquiring the bonds in the open market on or after March 1, 2026. On each relevant date related to the bond, the staff from the finance department of Titan Company obtained information on the appropriate market rate for bonds of similar risk and maturity. The market rates for the bond on the corresponding dates are summarized below: Mar 1, 2021 12% Sept 1, 2021 13% Dec 31, 2021 8.8% Sept 1, 2025 8% Sept 1, 2026 10.8% Mar 1, 2030 10.2% Note: all changes in the market rate for the bonds are due to change in the general interest rate. In August 2026, the executives at Titan Company concluded that the most prudent course of action with respect to its free cash flows is to use the free cash flows to extinguish a portion of the bonds that were issued on March 1, 2021 (the above bonds). Accordingly, only 60% of the bonds were called on September 1, 2026. Forty percent of the bonds that were not called remained outstanding until the maturity, and were paid upon maturity. Required: 1.1. Determine the proceeds received from issuance of the bonds on March 1, 2021 and prepare the necessary journal entry in the appropriate section of the accompanying Excel workbook (LastName_HW1Titan.xlsx). 1.1.1. Please show all inputs and computations in cells C18:D30 of the Part1ASC_30_35_40 tab/worksheet. 1.1.2. Once you complete the computations, please show the corresponding journal entry in the general journal provided in J18:N29 of the Part1 ASC_30_35_40 tab/worksheet. 1.1.3. Comment on the factors that led to the difference between face value and proceeds received March 1 in relation to issuance of the bonds. In other words, explain the reason(s) for which the issuer accepted an amount different from the face amount; and describe, in a language that is clear and understandable, what the difference between the face amount and the bond price on the issue date represents and how it will be disposed in the future [what item(s) does it affect and how does it affect the item(s)?] Provide your response in the textbox given to the right of the general journal 2 used for requirement 1.1.2. Please be sure to show discussions of different concepts or procedures in separate paragraphs. 1.2. Complete the amortization table for the bonds in the amortization table section (C37:451) of the Part1ASC_30_35_40 tab/worksheet and prepare the necessary journal entries. Note: if the company were to use the straight-line method of amortization for discount or premium on bonds payable, interest expense would be materially different from the interest expense under the effective interest method. 1.2.1. Complete the amortization table using Excel formulas. No points will be assigned for directly typed values when formulas are expected. Direct data entry is expected only for cells that are shaded yellow (cells with yellow fill color). Complete the amortization table only for Mar 1, 2021 - Sept 1, 2026. 1.2.1. Complete the amortization table using Excel formulas. No points will be assigned for directly typed values when formulas are expected. Direct data entry is expected only for cells that are shaded yellow (cells with yellow fill color). Complete the amortization table only for Mar 1, 2021 Sept 1, 2026. 1.2.2. Once you complete the amortization schedule, show the corresponding journal entries for the dates shown in the general journal given in 340:N54 of the Part1ASC_30_35_40 tab/worksheet. 1.2.3. In the textbox given to the right of the general journal used for 1.2.2, first explain why a journal entry had to be made on December 31, 2021 and March 1, 2022. Next, in a separate paragraph, explain why amounts (interest expense, interest payment or payable, and amortization of discount or premium) had to be allocated. Show the additional computations just below the general journal used for requirement 1.2.2 (i.e., show computations in J56:N63). 1.3. Prepare the necessary journal entries that must be made on September 1, 2026 and March 1, 2031 when 60% of the bonds were extinguished and when 40% of the bonds were paid upon maturity, respectively. 1.3.1. Show the journal entries in the general journal in J67:N87 of Part1ASC_30_35_40 tab/worksheet. Be sure to show the computations related to these entries in J90:N99. For the March 1, 2031 entry, show only the entry for payment of the portion of the principal (payment of 40% of the principal). 1.3.2. In the textbox provided to the right of the general journal used for requirement 1.3.1, explain why a journal entry (or journal entries) had to be made on September 1, 2026. Also explain why a gain or a loss had to be recognized in one of the journal entries. Part 1: Accounting for bonds payable On March 1, 2021, Titan Company received proceeds from issuance of its 500, ten-year, 9% bonds. These bonds are dated March 1, 2021, and pay interest semiannually on March 1 and September 1. Even though these bonds are due on March 1, 2031, it is indicated in the bond indenture that Titan Company can settle the liability, partially or in full, by either calling these bonds at 102.5 or by acquiring the bonds in the open market on or after March 1, 2026. On each relevant date related to the bond, the staff from the finance department of Titan Company obtained information on the appropriate market rate for bonds of similar risk and maturity. The market rates for the bond on the corresponding dates are summarized below: Mar 1, 2021 12% Sept 1, 2021 13% Dec 31, 2021 8.8% Sept 1, 2025 8% Sept 1, 2026 10.8% Mar 1, 2030 10.2% Note: all changes in the market rate for the bonds are due to change in the general interest rate. In August 2026, the executives at Titan Company concluded that the most prudent course of action with respect to its free cash flows is to use the free cash flows to extinguish a portion of the bonds that were issued on March 1, 2021 (the above bonds). Accordingly, only 60% of the bonds were called on September 1, 2026. Forty percent of the bonds that were not called remained outstanding until the maturity, and were paid upon maturity. Required: 1.1. Determine the proceeds received from issuance of the bonds on March 1, 2021 and prepare the necessary journal entry in the appropriate section of the accompanying Excel workbook (LastName_HW1Titan.xlsx). 1.1.1. Please show all inputs and computations in cells C18:D30 of the Part1ASC_30_35_40 tab/worksheet. 1.1.2. Once you complete the computations, please show the corresponding journal entry in the general journal provided in J18:N29 of the Part1 ASC_30_35_40 tab/worksheet. 1.1.3. Comment on the factors that led to the difference between face value and proceeds received March 1 in relation to issuance of the bonds. In other words, explain the reason(s) for which the issuer accepted an amount different from the face amount; and describe, in a language that is clear and understandable, what the difference between the face amount and the bond price on the issue date represents and how it will be disposed in the future [what item(s) does it affect and how does it affect the item(s)?] Provide your response in the textbox given to the right of the general journal 2 used for requirement 1.1.2. Please be sure to show discussions of different concepts or procedures in separate paragraphs. 1.2. Complete the amortization table for the bonds in the amortization table section (C37:451) of the Part1ASC_30_35_40 tab/worksheet and prepare the necessary journal entries. Note: if the company were to use the straight-line method of amortization for discount or premium on bonds payable, interest expense would be materially different from the interest expense under the effective interest method. 1.2.1. Complete the amortization table using Excel formulas. No points will be assigned for directly typed values when formulas are expected. Direct data entry is expected only for cells that are shaded yellow (cells with yellow fill color). Complete the amortization table only for Mar 1, 2021 - Sept 1, 2026. 1.2.1. Complete the amortization table using Excel formulas. No points will be assigned for directly typed values when formulas are expected. Direct data entry is expected only for cells that are shaded yellow (cells with yellow fill color). Complete the amortization table only for Mar 1, 2021 Sept 1, 2026. 1.2.2. Once you complete the amortization schedule, show the corresponding journal entries for the dates shown in the general journal given in 340:N54 of the Part1ASC_30_35_40 tab/worksheet. 1.2.3. In the textbox given to the right of the general journal used for 1.2.2, first explain why a journal entry had to be made on December 31, 2021 and March 1, 2022. Next, in a separate paragraph, explain why amounts (interest expense, interest payment or payable, and amortization of discount or premium) had to be allocated. Show the additional computations just below the general journal used for requirement 1.2.2 (i.e., show computations in J56:N63). 1.3. Prepare the necessary journal entries that must be made on September 1, 2026 and March 1, 2031 when 60% of the bonds were extinguished and when 40% of the bonds were paid upon maturity, respectively. 1.3.1. Show the journal entries in the general journal in J67:N87 of Part1ASC_30_35_40 tab/worksheet. Be sure to show the computations related to these entries in J90:N99. For the March 1, 2031 entry, show only the entry for payment of the portion of the principal (payment of 40% of the principal). 1.3.2. In the textbox provided to the right of the general journal used for requirement 1.3.1, explain why a journal entry (or journal entries) had to be made on September 1, 2026. Also explain why a gain or a loss had to be recognized in one of the journal entries