Question 1 (40 points) Saved Question 1- 40 Marks: Suggested time 36 minutes Dodger Inc required capital to update is manufacturing facilities to current day technology so decided to issue a bond to raise the required funding. The $750,000 bond dated September 1, 2021 carried an interest rate of 5% payable every six months on February 28th and August 31st. The bond matures on August 31, 2029. Dodger Inc. follows IFRS and has a December 31st year end. PLEASE USE THE PRESENT VALUE TABLES AT THE BACK OF YOUR TEXT BOOK.. Any calculations requiring a PV calculation must use these factors. You must use applicable PV factors and show calculations to support your answers. Marks will be deducted if you do not show your calculations Please answer the questions below related to Dodger Inc. THERE ARE 4 PARTS TO THIS QUESTION 1. On September 1, 2021, the entire bond issue was sold to yield interest at the market rate of 8%. The following bond amortization table was calculated on this assumption Interest Interest payment Expense Amortization Date Sept 1 2021 Feb 28 2022 Aug 31 2022 Feb 28 2023 Aug 31 2023 Feb 28 2024 Aug 31 2024 Feb 28 2025 Aug 31 2025 Feb 28 2026 Aug 31 2026 Feb 28 2027 Aug 31 2027 Feb 28 2028 Aug 31 2028 Feb 28 2029 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 18,750 24,757 24,997 25,247 25,507 25,777 26,058 26,350 26,654 26,970 27,299 27,641 27,997 28,367 28,751 29,151 6,007 6,247 6,497 6,757 7,027 7,308 7,600 7,904 8,220 8,549 8,891 9,247 9,617 10,001 10,401 Unamoritzed Discount 131,087 125,080 118,834 112,337 105,581 98,554 91,246 83,646 75,742 67,521 58,972 50,081 40,834 31,218 21,216 10,815 Carrying Value 618,913 624,920 631,166 637,663 644,419 651,446 658,754 666,354 674,258 682,479 691,028 699,919 709,166 718,782 728,784 739,185 Aia 21 2020 10 7n 20 567 10 017 750 na Aug 31 2028 Feb 28 2029 Aug 31 2029 18,750 18,750 18,750 28,751 29,151 29,567 10,001 10,401 10,817 21,216 10,815 (2) 728,784 739,185 750,002 Required: 1. Show how the bond issue price of $618,913 is calculated. (5 marks) 2. (8 marks) Assuming the bond was sold September 1, 2021, prepare the journal entries that Dodger Inc would make on the following dates: 8 marks Date Debit account Credit account Debit $ Credit $ Dec 31 2021 (Year End) Show calcs Feb 28, 2022 Int payment) Shows calcs. 3. Assume the bond was still dated at September 1, 2021 but due to an unsettled market, the entire bond is not sold until May 1, 2025. The market rate of interest remained at 8%. Prepare the journal entry that would be made to record the issuance under these assumptions. 12 marks Date Debit account Credit account Debit $ Credit $ 4. Assume the entire bond was sold on September 1, 2021 to yield 8%. On January 31, 2025, 25% of the bond issue was retired at 105 plus accrued interest. Prepare the journal entries at this date to record the retirement. Show calculations (15 marks) Date Debit account Credit account Debit $ Credit $
