# Answered Essay: On January 1, the first improvement products.Interest \$17,138,298 day of its fiscal year, Pretender Company issued \$18,500,000 of fiv

On January 1, the first improvement products.Interest \$17,138,298 day of its fiscal year, Pretender Company issued \$18,500,000 of five-year, 10% bonds to finance its operations of producing and selling home is payable semiannually. The bonds were issued at a market (effective) interest rate of 12%, resulting in Pretender Company receiving cash or Required: A. Journalize the entries to record the following (refer to the Chart of Accounts for exact wording of account titles): 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round yousr answer to the nearest dolar.) B. Determine the amount of the bond interest expense for the first year C. Explain why the company was able to issue the bonds for only \$17,138,298 rather than for the face amount of \$18,500,000

Face Value of Bonds = \$18,500,000
Proceed from Issue = \$17,138,298

Annual Coupon Rate = 10%
Semi-annual Coupon Rate = 5%
Semi-annual Coupon = 5%*\$18,500,000
Semi-annual Coupon = \$925,000

Annual Market Rate = 12%
Semi-annual Market Rate = 6%

June 30:

Interest Expense = 6%*\$17,138,298
Interest Expense = \$1,028,297.88

Semi-annual Coupon = \$925,000

Discount Amortized = \$1,028,297.88 – \$925,000.00
Discount Amortized = \$103,297.88

Carrying Value = \$17,138,298 + \$103,297.88
Carrying Value = \$17,241,595.88

December 31:

Interest Expense = 6%*\$17,241,595.88
Interest Expense = \$1,034,495.75

Semi-annual Coupon = \$925,000

Discount Amortized = \$1,034,495.75 – \$925,000
Discount Amortized = \$109,495.75

Interest Expense for the year = \$1,028,297.88 + \$1,034,495.75
Interest Expense for the year = \$2,062,793.63

Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

Try it now!

## Calculate the price of your order

Total price:
\$0.00

How it works?

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

HOW OUR ONLINE ESSAY WRITING SERVICE WORKS

Let us write that nagging essay.

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.

Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.

Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.