Transcribed Image Text
On July 1, Year 1, Danzer Industries Inc. issued $68,000,000 of20-year, 11% bonds at a market (effective) interest rate of 14%,receiving cash of $54,404,080. Interest on the bonds is payablesemiannually on December 31 and June 30. The fiscal year of thecompany is the calendar year.Required:For all journal entries: If an amount box does not require anentry, leave it blank.1. Journalize the entry to record the amount ofcash proceeds from the issuance of the bonds.Year 1 July 1CashDiscount on Bonds PayableBonds PayableFeedback2. Journalize the entries to record thefollowing:a. The first semiannual interest payment on December 31, Year 1,and the amortization of the bond discount, using the interestmethod. (Round to the nearest dollar.)Year 1 Dec. 31Interest ExpenseDiscount on Bonds PayableCashFeedbackb. The interest payment on June 30, Year 2, and the amortizationof the bond discount, using the interest method. (Round to thenearest dollar.)Year 2 June 30Interest ExpenseDiscount on Bonds PayableCashFeedback3. Determine the total interest expense forYear 1.$