You are an accounting intern working for SpringFit Corporation. You have recently been assigned to help one of the accountants who is doing an internal audit of the business. You will be assisting with a review of the payables issued by SpringFit Corporation. Your first task is to review the previous years journal entries, shown below.

Journal Entries, Year 1

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JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1	Jan. 1	Cash		1,004,720.00
2		Premium on Bonds Payable			58,720.00
3		Bonds Payable			946,000.00
4	Jun. 30	Interest Expense		18,349.00
5		Premium on Bonds Payable		2,936.00
6		Cash			21,285.00
7	Jul. 1	Cash		1,729,164.00
8		Discount on Bonds Payable		70,836.00
9		Bonds Payable			1,800,000.00
10	Oct. 1	Cash		1,500,000.00
11		Notes Payable			1,500,000.00
12	Dec. 31	Interest Expense		18,349.00
13		Premium on Bonds Payable		2,936.00
14		Cash			21,285.00
15	31	Interest Expense		22,500.00
16		Interest Payable			22,500.00
17	31	Interest Expense		37,403.00
18		Discount on Bonds Payable			5,903.00
19		Cash			31,500.00
20	31	Income Summary		96,601.00
21		Interest Expense			96,601.00

Bonds Payable

Shaded cells have feedback.

Review the journal entries on the SpringFit Corporation panel, then answer the questions below.

1.	Assuming that no bonds had been issued prior to Year 1, how many different bonds appear in the journal entries for this year? 3
2.	Which entry shows bonds issued at a contract rate lower than the market rate of interest? Choose the date. Jul. 1
3.	How much interest was paid during the year on the bonds in (2) above?
4.	What is the carrying amount of the bonds in (2) above at the end of the year?
5.	Which entry shows bonds that sold for more than their face amount? Choose the date. Jan. 1
6.	How much interest was paid during the year on the bonds in (5) above? None of these amounts
7.	Assuming that straight-line amortization is used for the bonds in (5), what is the bond life? Cannot be determined
8.	What is the carrying value of the bonds in (5) above at the end of the year?
9.	Considering only the Year 1 journal entries, how much interest was probably accrued on the note payable issued during the year?