Need help badly, i\'m up to my neck in make-up work due being sick. I need to fi

Question

Need help badly, i'm up to my neck in make-up work due being sick. I need to finish this today as my semester ends today. Anybody please help! I would really appreciate it. Thank you so very much.

Campbell, Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell issued $55,000,000 of 20-year, 14% bonds at a market (effective) interest rate of 12%, receiving cash of $63,262,100. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.

1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds.

2. Journalize the entries to record the following:

a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the interest method. (If required, round your answers to the nearest dollar.)

3. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the interest method. (Round your answers to the nearest dollar.)

4.Determine the total interest expense for Year 1.

Explanation / Answer

Journal entry :

Interest expenses a/c

(63262100-54274)*12%*6/12

4 Total interest expenses = (3792470+3795726) = 7588196

Entry No Date Accounts & explanation debit credit 1 Year 1, July 1 Cash a/c 63262100 Bonds payable 55000000 Premium on bonds payable 8262100 (TO record issuance of bonds payable) 2 Year 1, Dec 31 Interese expenses a/c (63262100*12%*6/12) 3795726 Amortization of premium on bonds payable 54274 Interest payable a/c (55000000*14%*6/12) 3850000 (To record interest) 3 Year 2 June 30

Interest expenses a/c

(63262100-54274)*12%*6/12

3792470 Amortization of premium on bonds payable a/c 57530 Interest payable a/c 3850000 (TO record interest)

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