On July Y Danzer Industries Inc. issued $ of year, bonds at a market effective interest rate of receiving cash of $ Interest on the bonds is payable semiannually on December and June The fiscal year of the company is the calendar year.
Required:
Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July Y
Journalize the entries to record the following:
a The first semiannual interest payment on December Y and the amortization of the bond discount, using the straightline method.
b The interest payment on June Y and the amortization of the bond discount, using the straightline method.
Determine the total interest expense for Y
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?
Compute the price of $ received for the bonds by using the present value tables.
