Rodgers Corporation produces and sells football equipment. On July 1, Year 1, Rodgers Corporation issued $15,800,000 of 10-year, 13% bonds at a market (effective) interest rate of 12%, receiving cash of $16,706,048. 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 with a compound transaction, if an amount box does not require an entry, leave it blank.

Question Content Area

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

blankBonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds PayableCashCashCashAccounts PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds PayablePremium on Bonds PayablePremium on Bonds PayablePremium on Bonds PayableAccounts PayableBonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayableBonds PayableBonds PayableBonds Payable

Feedback Area

Feedback

Question Content Area

2. Journalize the entries to record the following:

a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar.

blankBonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayableInterest ReceivableInterest ExpenseInterest ExpenseInterest ExpenseBonds PayableCashDiscount on Bonds PayableInterest PayableInterest ReceivablePremium on Bonds PayablePremium on Bonds PayablePremium on Bonds PayablePremium on Bonds PayableBonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds PayableCashCashCash

Feedback Area

Feedback

Partially correct

Question Content Area

b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar.

blankBonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayableInterest ReceivableInterest ExpenseInterest ExpenseInterest ExpenseBonds PayableCashDiscount on Bonds PayableInterest PayableInterest ReceivablePremium on Bonds PayablePremium on Bonds PayablePremium on Bonds PayablePremium on Bonds PayableBonds PayableCashDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds PayableCashCashCash

Feedback Area

Feedback

Partially correct

Question Content Area

3. Determine the total interest expense for Year 1. Round to the nearest dollar. $fill in the blank f07718f4cf8ef9b_1

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?

YesNoYes

5. Compute the price of $16,706,048 received for the bonds by using Table 1, Table 2, Table 3 and Table 4. Round to the nearest dollar. Your total may vary slightly from the price given due to rounding differences.

Present value of the face amount$fill in the blank f07718f4cf8ef9b_3Present value of the semiannual interest paymentsfill in the blank f07718f4cf8ef9b_4Price received for the bonds$fill in the blank f07718f4cf8ef9b_5

Feedback Area

Feedback