Part A: Fraser High Corporation has decided to issue $2,000,000 of 4.5%, 10-year bonds, with semi-annual interest payments on September 1 and March 1. The bonds were issued on March 1, 2020 at 98.

Required:

1. Briefly answer the following questions:

1. How much cash did Fraser High receive when it issued the bonds?
2. How would Fraser High classify the cash receipt in part a in its Cash Flow Statement (i.e., cash flow from operating, investing, or financing activities)?
3. How much must Fraser High pay back to bondholders at maturity (not including the interest)?
4. How would Fraser High classify the cash payment in part c in its Cash Flow Statement (i.e., cash flow from operating, investing, or financing activities)?
5. How much cash interest will Fraser High pay every six months?

2. Journalize these transactions for Fraser High:

• The issuance of the bonds on March 1, 2020
• The interest payment and amortization of bond discount on September 1, 2020
• The interest accrual and amortization of bond discount on December 31, 2020
• Bonus Question (2 extra marks): Provide journal entries on March 1, 2021