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Present Value of Bonds Payable; Premium Moss Co. issued $880,000 of five-year, 13% bonds, with interest payable semiannually, at a market (effective) interest rate of 11940. Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar. Amortize Discount by Interest Method On the first day of its fiscal year, Ebert Company issued $18,000,000 of 5-year, 9% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Ebert receiving cash of $16,643,220. The company uses the interest method. a. Journalize the entries to record the following: 1. Sale of the bonds. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Cash Discount on Bonds Payable Bonds Payable TO Accounting numeric field Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. 2. First semiannual interest payment, induding amortization of discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense Discount on Bonds Payable Cash & Feedback As the discount or premium is amortized, the carrying amount of the bond changes. As a result, interest expense also changes each period. 3. Second semiannual interest payment, including amortization of discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense Discount on Bonds Payable Accounting numeric field Cash Check My Work As the discount or premium is amortized, the carrying amount of the bond changes. As a result, interest expense also changes each period. b. Compute the amount of the bond interest expense for the first year. Round to the nearest dollar. Annual interest paid Discount amortized Interest expense for first year

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