The BlackSandX Co. issued five-year bonds with the following features:

Issue date: January 1, 2020

Face value: $1,000,000

Annual coupon rate (C): 10%; semi-annual payment on June 30 and December 31.

Maturity: December 31, 2024 (5-years).

Answer the following questions for each of the following 3 cases of the annual yield to maturity (i) on the issue date.

Case 1: The bonds are issued when i = 10% return ( i = C)

Case 2: The bonds are issued when i = 14% return ( i > C)

Case 3: The bonds are issued when i = 8% return ( i < C)

a.Record the issuance of the bonds on 1/1/2020.

When i=10%

b.Record the first cash payment to the holders of the bonds on 6/30/2020.

c.Compute the book value of the bonds at the end of the fourth year (12/31/2023).

d.Record the scheduled retirement of the bonds on 12/31/2024.

e.BlackSandX Co. retired the bonds via open market repurchase on 7/1/2024 at a price equals to the face value of the bond. Record the transactions.