Question 4 On December 31, 20x0, a publicly accountable entity issued bonds dated December 31, 20x0. The bond characteristics are as follows:

Face value of bonds $60,000,000

Bond issue costs 460,000

Coupon rate 4.7%

Yield to maturity on date of issue 4.3%

Term 25 years

Interest payment dates Jun 30 and Dec 31

Required a) Prepare all journal entries relative to this bond issue for the year ended December 31, 20x0 and 20x1. b) What is the total interest expense for the year ended December 31, 20x3. When calculating this amount, use the direct method, i.e. directly calculate the carrying value of the bonds at the beginning and end of year and use these amounts to calculate the interest expense. c) On July 2, 20x18, the entity retires 30% of the bond issue at 102. Prepare the journal entry to record the bond retirement at July 2, 20x18.