Texxon Corporation issued $$500,000$ of $8\%,10-$year bonds. Interest is paid semiannually. Assume that the market rate for similar investments is $6$ percent.

$1.$ What is the semi$-$annual cash payment amount for this bond issue?

a$.$ $$40,000$

b$.$ $$30,000$

c$.$ $$15,000$

d$.$ $$20,000$

$2.$ What is the present value $($issue price$)$ of this bond issue at the market rate of interest?

a$.$ $$587,798$

b$.$ $$523,642$

c$.$ $$574,540$

d$.$ $$568,720$

$3.$ How much bond interest expense should be recorded on the first semi$-$annual interest payment date?

a$.$ $$45,963\mathrm{.}20$

b$.$ $$17,236\mathrm{.}20$

c$.$ $$22,981\mathrm{.}60$

d$.$ $$34,472\mathrm{.}40$

$4.$ These bonds would be issued at a premium $($i$.$e$.,$ your answer to #$2$ should be more than $$500,000).$ What amount of premium will be amortized on the first semi$-$annual interest payment date?

a$.$ $$1,490\mathrm{.}80$

b$.$ $$3,727\mathrm{.}00$

c$.$ $$1,863\mathrm{.}50$

d$.$ $$2,763\mathrm{.}80$

$5.$ What is the carrying value of the bonds after the first semi$-$annual interest payment date?

a$.$ $$571,776\mathrm{.}20$

b$.$ $$572,676\mathrm{.}50$

c$.$ $$570,813\mathrm{.}00$

d$.$ $$573,049\mathrm{.}20$

$6.$ The journal entry that would be made to record the issue of these bonds would include:

a$.$ a credit to cash for $$500,000$

b$.$ a debit to Bonds Payable for $$500,000$

c$.$ a credit to Premium on Bonds Payable for $$74,540$

d$.$ a credit to Premium on Bonds Payable for $$68,720$

$7.$ The journal entry that would be made when the first payment is made to the bondholders would include:

a$.$ a debit to Cash for $$20,000\mathrm{.}00$

b$.$ a credit to Discount on Bonds Payable for $$2,763\mathrm{.}80$

c$.$ a debit to Interest Expense for $$17,236\mathrm{.}20$

d$.$ a debit to Bonds Payable for $$20,000\mathrm{.}00$

$8.$ The journal entry that would be made when the final payment of $$500,000$ is made to the bondholders would include:

a$.$ a debit to Premium on Bonds Payable for $$68,720$

b$.$ a debit to Bonds Payable for $$500,000$

c$.$ a debit to Cash for $$500,000$

d$.$ a credit to Premium on Bonds Payable for $$20,000$