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 $47,000,000 of 20-year, 14% bonds at a market (effective) interest rate of 12%, receiving cash of $54,060,340. 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. Journalize the entries to record the following: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. Year 1 July 1 Cash - Premium on bonds payable - ? Bonds payable - ? 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.) Year 1 Dec. 31 Interest expense - ? Premium on bonds payable - ? Cash - ? b. 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.) Year 2 June 30 Interest expense - ? Premium on bonds payable - ? Cash - ? Determine the total interest expense for Year 1. = ?

Explanation / Answer

Amortization table year cash interest premium Carrying paid expense amortized value 7% 6% 1-Jul 54,060,340 31-Dec 3,290,000 3243620 46,380 54,013,960 30-Jun 3,290,000 3240838 49,162 53,964,798 cash interest paid = 47,000,000*14%*1/2 3290000 interest expense =CV*6% Journal 'entries Date Accounting titles & explanations Debit Credit 1-Jul cash 54,060,340 premium on bonds payable 7,060,340 Bonds payable 47,000,000 30-Jun interest expense 3243620 premium on bonds payable 46380 Cash 3290000 31-Dec interest expense 3240838 premium on bonds payable 49162 Cash 3290000 total interest expense for year 1 3,243,620

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