Rodgers Corporation produces and sells football equipment. On July 1, 20Y1, Rodgers issued $88,500,000 of 10-year, 12% bonds at a market (effective) interest rate of 10%, receiving cash of $99,529,100. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.

Required:

For all journal entries, if an amount box does not require an entry, leave it blank.

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1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.

Date	Account	Debit	Credit
20Y1 July 1	Bonds PayableCashDiscount on Bonds PayableInterest ExpensePremium on Bonds Payable
	Accounts PayableCashDiscount on Bonds PayableInterest ExpensePremium on Bonds Payable
	Accounts PayableBonds PayableCashDiscount on Bonds PayableInterest Expense

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2. Journalize the entries to record the following:

a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar.

Date	Account	Debit	Credit
20Y1 Dec. 31	Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest Payable
	Bonds PayableCashDiscount on Bonds PayableInterest PayablePremium on Bonds Payable
	Bonds PayableCashDiscount on Bonds PayableInterest ExpensePremium on Bonds Payable

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b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar.

Date	Account	Debit	Credit
20Y2 June 30	Bonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest Payable
	Bonds PayableCashDiscount on Bonds PayableInterest PayablePremium on Bonds Payable
	Bonds PayableCashDiscount on Bonds PayableInterest ExpensePremium on Bonds Payable

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3. Determine the total interest expense for 20Y1. Round to the nearest dollar.

4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest?

Yes/No

5. Compute the price of $99,529,100 received for the bonds by using the Present value at compound interest, and Present value of an annuity. Round your PV values to 5 decimal places and the final answers to the nearest dollar. Your total may vary slightly from the price given due to rounding differences.

Line Item Description	Price
Present value of the face amount	$
Present value of the semi-annual interest payments	$
Proceeds of bond issue	$