The founder of Frenza asks us to assist her in accounting and analysis of the corporations bonds, which have an annual contract rate of 8%. She wants to know the business and accounting implications of further debt issuances as she looks for ways to finance the growth of Frenza. The following Tableau Dashboard is provided to help us address her questions and provide recommendations for her business decisions.

.n Carrying Value Frenza Bond Amortization Unamortized Discount $100,000 9209 940DD 8000D700 $80,000 $60,000 $40,000 $20,000 $0 January 1, Year June 30, Year 1 December 31, June 30, Year 2 December 31, June 30, Year 3 December 31, Year 1 Year 3 1 Year 2 "Cash & inventry fr Competing Companies Market Rate Tor Company Bonds 10% Lika Nelo Frenza 550D0 Frenza 89% $50,000 42000 ka 6% $40,000 Boodt 49% $30,000 296 $20,000 096 $10,000 Total Equity & Net Income $0 Lika Nelo Frenza $100,000 $190,000 $85,000 Net Income .Tetal. Equitv....$409,00.. "O80FE55" $275.90.... Cash nventory Cash nvent ory Cash nvent ory 1(a). Prepare journal entries to record the issuance of Frenza bonds on January 1, Year 1. 1(b). Prepare journal entries to record the first and second interest payments on June 30, Year 1, and December 31, Year 1 1(c). Prepare journal entries to record the maturity of the bonds on December 31, Year 3. 2. Frenza needs to raise money to purchase new equipment. The founder is concerned about losing ownership control of her company. Which of the following ways to raise money would we recommend? 3. Frenza needs to raise money to purchase more inventory. The founder is concerned about the company's ability to make required cash payments when cash flows are low. Which of the following ways to raise money would we recommend? Journal entry worksheet 2 Record the semiannual interest payment and amortization on June 30, Year 1 Note: Enter debits before credits. Debit Date General Journal Credit Jun 30 View general journal Record entry Clear entry Journal entry worksheet 1 2 Record the semiannual interest payment and amortization on December 31, Year 1 Note: Enter debits before credits. Date General Journal Debit Credit Dec 31 Record entry Clear entry View general journal Journal entry worksheet 1 Record the payment of bonds at the maturity date, December 31, Year 3 Note: Enter debits before credits. Date General Journal Debit Credit Dec 31 Record entry Clear entry View general journal Required 1A Required 1B Required 1C Required 2 Required 3 Frenza needs to raise money to purchase new equipment. The founder is concerned about losing ownership control of her company. Which of the following ways to raise money would we recommend? (Select all that apply.) Issue bonds ] Issue a note to a bank Issue common stock Reissuing treasury stock Required 1C Required 3 Required 1A Required 1B Required 1C Required 2 Required 3 Frenza needs to raise money to purchase more inventory. The founder is concerned about the company's ability to make required cash payments when cash flows are low. Which of the following ways to raise money would we recommend? (Select all that apply.) Issue bonds Issue a note to a bank Issue common stock | Issue preferred stock .n Carrying Value Frenza Bond Amortization Unamortized Discount $100,000 9209 940DD 8000D700 $80,000 $60,000 $40,000 $20,000 $0 January 1, Year June 30, Year 1 December 31, June 30, Year 2 December 31, June 30, Year 3 December 31, Year 1 Year 3 1 Year 2 "Cash & inventry fr Competing Companies Market Rate Tor Company Bonds 10% Lika Nelo Frenza 550D0 Frenza 89% $50,000 42000 ka 6% $40,000 Boodt 49% $30,000 296 $20,000 096 $10,000 Total Equity & Net Income $0 Lika Nelo Frenza $100,000 $190,000 $85,000 Net Income .Tetal. Equitv....$409,00.. "O80FE55" $275.90.... Cash nventory Cash nvent ory Cash nvent ory 1(a). Prepare journal entries to record the issuance of Frenza bonds on January 1, Year 1. 1(b). Prepare journal entries to record the first and second interest payments on June 30, Year 1, and December 31, Year 1 1(c). Prepare journal entries to record the maturity of the bonds on December 31, Year 3. 2. Frenza needs to raise money to purchase new equipment. The founder is concerned about losing ownership control of her company. Which of the following ways to raise money would we recommend? 3. Frenza needs to raise money to purchase more inventory. The founder is concerned about the company's ability to make required cash payments when cash flows are low. Which of the following ways to raise money would we recommend? Journal entry worksheet 2 Record the semiannual interest payment and amortization on June 30, Year 1 Note: Enter debits before credits. Debit Date General Journal Credit Jun 30 View general journal Record entry Clear entry Journal entry worksheet 1 2 Record the semiannual interest payment and amortization on December 31, Year 1 Note: Enter debits before credits. Date General Journal Debit Credit Dec 31 Record entry Clear entry View general journal Journal entry worksheet 1 Record the payment of bonds at the maturity date, December 31, Year 3 Note: Enter debits before credits. Date General Journal Debit Credit Dec 31 Record entry Clear entry View general journal Required 1A Required 1B Required 1C Required 2 Required 3 Frenza needs to raise money to purchase new equipment. The founder is concerned about losing ownership control of her company. Which of the following ways to raise money would we recommend? (Select all that apply.) Issue bonds ] Issue a note to a bank Issue common stock Reissuing treasury stock Required 1C Required 3 Required 1A Required 1B Required 1C Required 2 Required 3 Frenza needs to raise money to purchase more inventory. The founder is concerned about the company's ability to make required cash payments when cash flows are low. Which of the following ways to raise money would we recommend? (Select all that apply.) Issue bonds Issue a note to a bank Issue common stock | Issue preferred stock