On July 1, 20Y1, Danzer Industries Inc. issued $30,000,000 of 10-year, 11% bonds at a market (effective) interest rate of 12%, receiving cash of $28,279,368. Interest on the bonds is

On July 1, 20Y1, Danzer Industries Inc. issued $30,000,000 of 10-year, 11% bonds at a market (effective) interest rate of 12%, receiving cash of $28,279,368. 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, 20Y1. 2. Journalize the entries to record the following: A) The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. (Round to the nearest dollar B) The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. (Round to the nearest dollar.) 3. Determine the total interest expense for 20Y1. 4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest? Yes or No 5) Compute the price of $28,279,368 received for the bonds by using the present value tables. (Round to the nearest dollar.) Attached is the table of present values: Transcribed Image Text: Present Value Tables
Two present value tables are provided: Present Value of $1 at Compound Interest Due in n Periods and Pre:
Present Value of $1 at Compound Interest Due in n Periods
Periods
4.0%
4.5%
5%
5.5%
6%
6.5%
7%
1
0.96154
0.95694
0.95238
0.94787
0.94340
0.93897
0.93458
0.92456
0.91573
0.90703
0.89845
0.89000
0.88166
0.87344
3
0.88900
0.87630
0.86384
0.85161
0.83962
0.82785
0.81630
4
0.85480
0.83856
0.82270
0.80722
0.79209
0.77732
0.76290
5
0.82193
0.80245
0.78353
0.76513
0.74726
0.72988
0.71299
0.79031
0.76790
0.74622
0.72525
0.70496
0.68533
0.66634
7
0.75992
0.73483
0.71068
0.68744
0.66506
0.64351
0.62275
8
0.73069
0.70319
0.67684
0.65160
0.62741
0.60423
0.58201
9
0.70259
0.67290
0.64461
0.61763
0.59190
0.56735
0.54393
10
0.67556
0.64393
0.61391
0.58543
0.55839
0.53273
0.50835
11
0.64958
0.61620
0.58468
0.55491
0.52679
0.50021
0.47509
12
0.62460
0.58966
0.55684
0.52598
0.49697
0.46968
0.44401
13
0.60057
0.56427
0.53032
0.49856
0.46884
0.44102
0.41496
14
0.57748
0.53997
0.50507
0.47257
0.44230
0.41410
0.38782
15
0.55526
0.51672
0.48102
0.44793
0.41727
0.38883
0.36245
16
0.53391
0.49447
0.45811
0.42458
0.39365
0.36510
0.33873
17
0.51337
0.47318
0.43630
0.40245
0.37136
0.34281
0.31657
18
0.49363
0.45280
0.41552
0.38147
0.35034
0.32189
0.29586
19
0.47464
0.43330
0.39573
0.36158
0.33051
0.30224
0.27651
20
0.45639
0.41464
0.37689
0.34273
0.31180
0.28380
0.25842
Present Value Tables
21
0.43883
0,39679
0.35894
0.32486
0.29416
0.26648
0.24151
22
0.42196
0.37970
0.34185
0.30793
0.27751
0.25021
0.22571
23
0.40573
0.36335
0.32557
0.29187
0.26180
0.23494
0.21095
24
0.39012
0,34770
0.31007
0.27666
0.24698
0.22060
0.19715
25
0.37512
0.33273
0.29530
0.26223
0.23300
0.20714
0.18425
26
0.36069
0.31840
0.28124
0.24856
0.21981
0.19450
0.17220
27
0.34682
0.30469
0.26785
0.23560
0.20737
0.18263
0.16093
28
0.33348
0.29157
0.25509
0.22332
0.19563
0.17148
0.15040
29
0.32065
0.27902
0.24295
0.21168
0.18456
0.16101
0.14056
30
0.30832
0.26700
0.23138
0.20064
0.17411
0.15119
0.13137
31
0.29646
0.25550
0.22036
0.19018
0.16425
0.14196
0.12277
32
0.28506
0.24450
0.20987
0.18027
0.15496
0.13329
0.11474
33
0.27409
0.23397
0.19987
0.17087
0.14619
0.12516
0.10723
34
0.26355
0.22390
0.19035
0.16196
0.13791
0.11752
0.10022
35
0.25342
0.21425
0.18129
0.15352
0.13011
0.11035
0.09366
40
0.20829
0.17193
0.14205
0.11746
0.09722
0.08054
0.06678
45
0.17120
0.13796
0.11130
0.08988
0.07265
0.05879
0.04761
50
0.14071
0.11071
0.08720
0.06877
0.05429
0.04291
0.03395
Present Value of Ordinary Annuity of $1 per Period
Periods
4.0%
4.5%
5%
5.5%
6%
6.5%
7%
1
0.96154
0.95694
0.95238
0.94787
0.94340
0.93897
0.93458
2
1.88609
1.87267
1.85941
1.84632
1.83339
1.82063
1.80802
3
2.77509
2.74896
2.72325
2.69793
2.67301
2.64848
2.62432
3.62990
3.58753
3,54595
3.50515
3.46511
3.42580
3.38721
4.45182
4.38998
4.32948
4.27028
4.21236
4.15568
4.10020 Transcribed Image Text: 5.24214
5.15787
5.07569
4.99553
4.91732
4.84101
4.76654
7
6.00205
5.89270
5.78637
5.68297
5.58238
5.48452
5.38929
8
6.73274
6.59589
6.46321
6.33457
6.20979
6.08875
5.97130
9.
7.43533
7.26879
7.10782
6.95220
6.80169
6.65610
6.51523
10
8.11090
7.91272
7.72173
7.53763
7.36009
7.18883
7.02358
11
8.76048
8.52892
8.30641
8.09254
7.88687
7.68904
7.49867
12
9.38507
9.11858
8.86325
8.61852
8.38384
8.15873
7.94269
13
9.98565
9.68285
9.39357
9.11708
8.85268
8.59974
8.35765
14
10.56312
10.22283
9.89864
9.58965
9.29498
9.01384
8.74547
15
11.11839
10.73955
10.37966
10.03758
9.71225
9.40267
9.10791
16
11.65230
11.23402
10.83777
10.46216
10.10590
9.76776
9.44665
17
12.16567
11.70719
11.27407
10.86461
10.47726
10.11058
9.76322
18
12.65930
12.15999
11.68959
11.24607
10.82760
10.43247
10.05909
19
13.13394
12.59329
12.08532
11.60765
11.15812
10.73471
10.33560
20
13.59033
13.00794
12.46221
11.95038
11.46992
11.01851
10.59401
21
14.02916
13.40472
12.82115
12.27524
11.76408
11.28498
10.83553
22
14.45112
13.78442
13.16300
12.58317
12.04158
11.53520
11.06124
23
14.85684
14.14777
13.48857
12.87504
12.30338
11.77014
11.27219
24
15.24696
14.49548
13.79864
13.15170
12.55036
11.99074
11.46933
25
15.62208
14.82821
14.09394
13.41393
12.78336
12.19788
11.65358
26
15.98277
15.14661
14.37519
13.66250
13.00317
12.39237
11.82578
27
16.32959
15.45130
14.64303
13.89810
13.21053
12.57500
11.98671
28
16.66306
15.74287
14.89813
14.12142
13.40616
12.74648
12.13711
29
16.98371
16.02189
15.14107
14.33310
13.59072
12.90749
12.27767
30
17.29203
16.28889
15.37245
14.53375
13.76483
13.05868
12.40904
31
17.58849
16.54439
15.59281
14.72393
13.92909
13.20063
12.53181
32
17.87355
16.78889
15.80268
14.90420
14.08404
13.33393
12.64656
33
18.14765
17.02286
16.00255
15.07507
14.23023
13.45909
12.75379
34
18.41120
17.24676
16.19290
15.23703
14.36814
13.57661
12.85401
35
18.66461
17.46101
16.37419
15.39055
14.49825
13.68696
12.94767
40
19.79277
18.40158
17.15909
16.04612
15.04630
14.14553
13.33171
45
20.72004
19.15635
17.77407
16.54773
15.45583
14.48023
13.60552
50
21.48218
19.76201
18.25593
16.93152
15.76186
14.72452
13.80075

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