Present ValExercise2 (1).XISX (11.1 RB) Page of 2 Second Chances Incorporated completed the following transactions. An agreement was made between Second Chances Incorporated and Circle of Life, Inc (a not-for-profit). 10 Years from now, Circle of Life will pay Second Chances, an amount of $125,000 for undisclosed artifacts. What is the value of the future amount today? Assume that the current market rate is 8%. B) In a separate agreement, Second Chances entered into an agreement with Alpha & Omega to receive a series of cash payments. In the first 5 years, Second Chances would receive $10,000 a year. In years 6 through 9, Second Chances would receive $15,000 a year, and in year 10, Second Chances would receive $20,000. What is the value of these future payments worth today assuming a current market rate of 8%. C) Second Chances also decided to issue some long term bonds payable. $100,000 of debt were issued with a contractual rate of 12%. The current marekt rate is 10%. The bonds were issued on 1/1/2011 and pay interest semi-annually for 5 years. Second Chances has determined that the long term debt is not material to the financial statements so the straight-line method of amortization is appropriate. 1. What is the journal entry for the initial bond issuance? 2. What is the journal entry for the first interest payment? 3. What is the journal entry for the second interest payment? 4. What is the carrying value at the end of the first year? 5. What is the journal entry for the last interest payment? 6. What is the journal entry for the retirement of the bonds? 7. What is the difference between the total cash paid out and the interest expense? What does this difference represent