Question 7.4 On June 30, 2016, the market interest rate was 7%. Starship Enterprises issues $500,000 of 8%, 20- bonds at 110.625. The bonds pay interest on June 30 and December 31. Starship amortizes bonds b the effective-interest method. 1. Record issuance of the bonds on June 30, 2016, the payment of interest on December 31, 2016, and the semi-annual interest payment on June 30, 2017. Question 7.5 Alliance Agreement Corporation is considering two plans for raising $2,500,000 to expand its currer operations. The first plan involves the sale of $2,500,000, 8%, 10-year bonds sold at face value. The second plan involves selling 50,000 common shares at $50 each. Alliance Agreement Corporation currently has outstanding 200,000 shares of stock and a net income of $900,000. Either plan is expected to generate an additional income of $400,000 before interest and taxes. The income tax r is 30%. 1. Calculate earnings per share for both plans