Outdoor Adventure Company is considering raising additional capital for further expansion. The company wants to finance a new business venture into guided trips down the Amazon River in South America. Additionally, the company wants to add another building on theirland to offer more services for local customers.1 (Click the icon to viewing the financing information.)More InfoRead the requirements.Requirement 1. Will the bonds issue at face value, a premium, or a discount?Outdoor Adventure Company plans to raise the capital by issuing $1,200,000 of 9%, six-year bonds onJanuary 2, 2020. The bonds pay interest semiannually on June 30 and December 31. The companyreceives $1,198,320 when the bonds are issued.Outdoor Adventure's bonds will be issued atbecauseThe company also issues a mortgage payable for $500,000 on January 2, 2020. The proceeds from themortgage will be used to construct the new building. The mortgage requires annual payments of $25,000plus interest for twenty years, payable on December 31. The mortgage interest rate is 9%.RequirementsPrintDoneWill the bonds issue at face value, a premium, or a discount?Record the following transactions. Include dates and round to the nearest dollar. Omitexplanations.1.2.a. Cash received from the bond issue.b. Cash received from the mortgage payable.c. Semiannual bond interest payments for 2020. Amortize the premium or discountusing the straight-line amortization method.d. Payment on the mortgage payable for 2020.Calculate the total interest expense incurred in 2020.3.

A company issues bonds and mortgage payable to raise capital for the company. The company has to…

Outdoor Adventure Company is considering raising additional capital for further expansion. The company wants to finance a new business venture into guided trips down the Amazon River in South America. Additionally, the company wants to add another building on thei land to offer more services for local customers. 1 (Click the icon to viewing the financing information.) More Info Read the requirements. Requirement 1. Will the bonds issue at face value, a premium, or a discount? Outdoor Adventure Company plans to raise the capital by issuing $1,200,000 of 9%, six-year bonds on January 2, 2020. The bonds pay interest semiannually on June 30 and December 31. The company receives $1,198,320 when the bonds are issued. Outdoor Adventure's bonds will be issued at V because The company also issues a mortgage payable for $500,000 on January 2, 2020. The proceeds from the mortgage will be used to construct the new building. The mortgage requires annual payments of $25,000 plus interest for twenty years, payable on December 31. The mortgage interest rate is 9%. A Requirements Print Done 1. Will the bonds issue at face value, a premium, or a discount? 2. Record the following transactions. Include dates and round to the nearest dollar. Omit explanations. a. Cash received from the bond issue. b. Cash received from the mortgage payable. c. Semiannual bond interest payments for 2020. Amortize the premium or discount using the straight-line amortization method. d. Payment on the mortgage payable for 2020. Calculate the total interest expense incurred in 2020.

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter1: Introduction To Finance For Entrepreneurs

Section: Chapter Questions

Problem 4EP