Pixie Inc. has a December 31 fiscal year end. On January 1, 2021, Pixie Inc. issued bonds with a face value of $20,000,000. The bonds have a coupon rate of 8% and mature on December 31, 2025. The bonds pay interest semiannually on June 30 and December 31 each year. At the time the bonds were issued, the market rate of interest for similar bonds was 6%. Required: 1. Calculate the issue price of the bond. Note: Present Value Tables can be found at the end of this question. 2. Prepare a journal entry to record the issuance of the bond. 3. Prepare any necessary journal entries for bond interest at the following dates: (a) June 30, 2021 (b) December 31, 2021. Round all entries to the nearest dollar. 4. Calculate the carrying value of the bonds at December 31, 2021.

Table A.1 Present Value of $1,p=(1+i)n1 Table A.2 Present Value of Annuity of $1,p=i11/(1+i)n