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Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) 3. Determine the total interest expense for Year 1. 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 5. Compute the price of $64,009,069 received for the bonds by using the tables shown in Present Value Tables. (Round to the nearest dollar.) *Refer to the Chart of Accounts for exact wording of account titles.

Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) 3. Determine the total interest expense for Year 1. 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 5. Compute the price of $64,009,069 received for the bonds by using the tables shown in Present Value Tables. (Round to the nearest dollar.) *Refer to the Chart of Accounts for exact wording of account titles.

Financial Accounting
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 6PA: Saverin, Inc. produces and sells outdoor equipment. On July 1, 2016, Saverin, Inc. issued 62,500,000...
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Instructions Present Value Tables Chart of Accounts Journal Final Questions Instructions Campbell Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell Inc. issued $60,400,000 of 10-year, 12% bonds at a market (effective) interest rate of 11%, receiving cash of $64,009,069. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) 3. Determine the total interest expense for Year 1. 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 5. Compute the price of $64,009,069 received for the bonds by using the tables shown in Present Value Tables. (Round to the nearest dollar.) *Refer to the Chart of Accounts for exact wording of account titles.
Transcribed Image Text:Instructions Present Value Tables Chart of Accounts Journal Final Questions Instructions Campbell Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell Inc. issued $60,400,000 of 10-year, 12% bonds at a market (effective) interest rate of 11%, receiving cash of $64,009,069. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) 3. Determine the total interest expense for Year 1. 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 5. Compute the price of $64,009,069 received for the bonds by using the tables shown in Present Value Tables. (Round to the nearest dollar.) *Refer to the Chart of Accounts for exact wording of account titles.
sond pre Instructions Instructions Journal 1 Present Value Tables Chart of Accounts Journal Final Questions 1. 3. Determine the total interest expense for Year 1. $ 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? OYes O No 5. Compute the price of $64,009,069 received for the bonds by using the tables shown in Present Value Tables. (Round to the nearest dollar.) Present value of the face amount Present value of the semiannual interest payments Price received for the bonds Final Questions $ $
Transcribed Image Text:sond pre Instructions Instructions Journal 1 Present Value Tables Chart of Accounts Journal Final Questions 1. 3. Determine the total interest expense for Year 1. $ 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? OYes O No 5. Compute the price of $64,009,069 received for the bonds by using the tables shown in Present Value Tables. (Round to the nearest dollar.) Present value of the face amount Present value of the semiannual interest payments Price received for the bonds Final Questions $ $
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