Campbell Inc. produces and sells outdoor equipment. On July 1,
Year 1, Campbell issued $87,000,000 of 10-year, 9% bonds at a
market (effective) interest rate of 8%, receiving cash of
$92,912,072. Interest on the bonds is payable semiannually on
December 31 and June 30. The fiscal year of the company is the
calendar year.

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Question: Campbell Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell issued $87,000,00…
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Required:

1. Journalize the entry to record
the amount of cash proceeds from the issuance of the bonds on July
1, Year 1.*
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 straight-line method. (Round to the nearest
dollar.)
b. The interest payment on June
30, Year 2, and the amortization of the bond premium, using the
straight-line method. (Round to the nearest dollar.)
3. Determine the total interest
expense for Year 1.
4. Will the bond proceeds always
be greater than the face amount of the bonds when the contract rate
is greater than the market rate of interest?
5. Compute the price of
$92,912,072 received for the bonds by using the present value
tables. (Round to the nearest dollar.)

*Refer to the Chart of Accounts
for exact wording of account titles.
CHART
OF ACCOUNTS
Campbell Inc.
General Ledger
ASSETS
110 Cash
111 Petty Cash
121 Accounts Receivable
122 Allowance for Doubtful
Accounts
126 Interest Receivable
127 Notes Receivable
131 Merchandise Inventory
141 Office Supplies
142 Store Supplies
151 Prepaid Insurance
191 Land
192 Store Equipment
193 Accumulated Depreciation-Store
Equipment
194 Office Equipment
195 Accumulated Depreciation-Office
Equipment
LIABILITIES
210 Accounts Payable
221 Salaries Payable
231 Sales Tax Payable
232 Interest Payable
241 Notes Payable
251 Bonds Payable
252 Discount on Bonds Payable
253 Premium on Bonds Payable
EQUITY
311 Common Stock
312 Paid-In Capital in Excess of
Par-Common Stock
315 Treasury Stock
321 Preferred Stock
322 Paid-In Capital in Excess of
Par-Preferred Stock
331 Paid-In Capital from Sale of
Treasury Stock
340 Retained Earnings
351 Cash Dividends
352 Stock Dividends
390 Income Summary

Question: Campbell Inc. produces and sells outdoor equipment. On July 1,Year 1, Campbell issued $87,000,00...

Question: Campbell Inc. produces and sells outdoor equipment. On July 1,Year 1, Campbell issued $87,000,00...

Question: Campbell Inc. produces and sells outdoor equipment. On July 1,Year 1, Campbell issued $87,000,00...

REVENUE
410 Sales
610 Interest Revenue
611 Gain on Redemption of Bonds
EXPENSES
510 Cost of Merchandise Sold
515 Credit Card Expense
516 Cash Short and Over
521 Sales Salaries Expense
522 Office Salaries Expense
531 Advertising Expense
532 Delivery Expense
533 Repairs Expense
534 Selling Expenses
535 Rent Expense
536 Insurance Expense
537 Office Supplies Expense
538 Store Supplies Expense
541 Bad Debt Expense
561 Depreciation Expense-Store
Equipment
562 Depreciation Expense-Office
Equipment
590 Miscellaneous Expense
710 Interest Expense
711 Loss on Redemption of Bonds

Question: Campbell Inc. produces and sells outdoor equipment. On July 1,Year 1, Campbell issued $87,000,00...Question: Campbell Inc. produces and sells outdoor equipment. On July 1,Year 1, Campbell issued $87,000,00...

Show transcribed image text Present Value Tables Two present value tables are provided Present Value of $1 at Compound Interest Due in n Periods and Present Value of Ordinary Annuity of $1 per Period. Use them as directed in the problem requirements Present value of $1 at Compound Interest Due in n periods periods 4.0% 4.5% 5% 5.50% 6% 6.50% 70% 0.96154. 0.95694. 0.95238 0.94787 0.94340 0.93897 0.93458 0.92456 0.91573 0.90703 0.89845 0.89000 0.88166 0.87344. 3 0.88500 0.87630 0.86384. 0.85161. 0.83962 0.82785 0.81630 0.85480 0.83856 0.82270 0.80722 0.79209 0.77732 0.76290 0.82193 0.80245 0.78353 0.76513 0.74726 0.72988 0.71299 0.79031. 0.76790 0.74622 0.72525 0.70496 0.68533 66634 0.68744 66506 64351 0.75992 0.73483 0.71068 0.62275 0.73069 0.70319 0.67684. 0.65160 0.62741. 0.60423 0.58201. 0.70259 0.67290 64461 0.61763 0.59190 0.56735 0.54393 0.67556 64393 0.58543 0.55839 10 61391 0.53273 0.50835 11 64958 0.61620 0.58468 0.55491. 0.52679 0.50021. 0.47509 0.62460 0.58966 0.55684. 0.52598 0.49697 0.46968 0.44401 12 0.49856 0.46884. 0.44102 0.41496 13 0.60057 0.56427 0.53032 14 0.57748 0.53997 0.50507 0.47257 0.44230 0.41410 0.38782 0.51672 048102 044793 15 0.55526 0.41727 0.38883 0.36245 16 0.53391. 0.49447 0.45811. 0.42458 0.39365 0.36510 0.33873 17 0.51337 0.47318 0.43630 0.40245 0.37136 0.34281. 0.31657 18 0.49363 0.45280 0.41552 0.38147 0.35034 0.32189 0.29586 19 0.47464. 0.43330 0.39573 0.36158 0.33051. 0.30224 0.27651. 20 0.45639 0.41464. 0.37689 0.34273 0.31180 0.28380 0.25842 0.43883 0.39679 0.35894. 0.32486 0.29416 0.26648 21 0.24151. 22 0.42196 0.37970 0.34185 0.30793 0.27751. 0.25021. 0.22571. 23 0.40573 0.36335 0.32557 0.29187 0.26180 0.23494. 0.21095 24 0.39012 0.34770 0.31007 0.27666 0.24698 0.22060 0.19715 25 0.37512 0.33273 0.29530 0.26223 0.23300 0.20714 0.18425 26 0.36069 0.31840 0.28124 0.24856 0.21981. 0.19450 0.17220 0.34682 0.30469 0.26785 0.23560 0.20737 0.18263 16093 28 0.33348 0.29157 0.25509 0.22332 0.19563 0.17148 0.15040 29 0.32065 0.27902 0.24295 0.21168 0.18456 0.16101. 0.14056 30 0.30832 0.26700 0.23138 0.20064. 0.17411. 0.15119 0.13137 31 0.29646 0.25550 0.22036 0.19018 16425 14196 0.12277

Present Value Tables Two present value tables are provided Present Value of $1 at Compound Interest Due in n Periods and Present Value of Ordinary Annuity of $1 per Period. Use them as directed in the problem requirements Present value of $1 at Compound Interest Due in n periods periods 4.0% 4.5% 5% 5.50% 6% 6.50% 70% 0.96154. 0.95694. 0.95238 0.94787 0.94340 0.93897 0.93458 0.92456 0.91573 0.90703 0.89845 0.89000 0.88166 0.87344. 3 0.88500 0.87630 0.86384. 0.85161. 0.83962 0.82785 0.81630 0.85480 0.83856 0.82270 0.80722 0.79209 0.77732 0.76290 0.82193 0.80245 0.78353 0.76513 0.74726 0.72988 0.71299 0.79031. 0.76790 0.74622 0.72525 0.70496 0.68533 66634 0.68744 66506 64351 0.75992 0.73483 0.71068 0.62275 0.73069 0.70319 0.67684. 0.65160 0.62741. 0.60423 0.58201. 0.70259 0.67290 64461 0.61763 0.59190 0.56735 0.54393 0.67556 64393 0.58543 0.55839 10 61391 0.53273 0.50835 11 64958 0.61620 0.58468 0.55491. 0.52679 0.50021. 0.47509 0.62460 0.58966 0.55684. 0.52598 0.49697 0.46968 0.44401 12 0.49856 0.46884. 0.44102 0.41496 13 0.60057 0.56427 0.53032 14 0.57748 0.53997 0.50507 0.47257 0.44230 0.41410 0.38782 0.51672 048102 044793 15 0.55526 0.41727 0.38883 0.36245 16 0.53391. 0.49447 0.45811. 0.42458 0.39365 0.36510 0.33873 17 0.51337 0.47318 0.43630 0.40245 0.37136 0.34281. 0.31657 18 0.49363 0.45280 0.41552 0.38147 0.35034 0.32189 0.29586 19 0.47464. 0.43330 0.39573 0.36158 0.33051. 0.30224 0.27651. 20 0.45639 0.41464. 0.37689 0.34273 0.31180 0.28380 0.25842 0.43883 0.39679 0.35894. 0.32486 0.29416 0.26648 21 0.24151. 22 0.42196 0.37970 0.34185 0.30793 0.27751. 0.25021. 0.22571. 23 0.40573 0.36335 0.32557 0.29187 0.26180 0.23494. 0.21095 24 0.39012 0.34770 0.31007 0.27666 0.24698 0.22060 0.19715 25 0.37512 0.33273 0.29530 0.26223 0.23300 0.20714 0.18425 26 0.36069 0.31840 0.28124 0.24856 0.21981. 0.19450 0.17220 0.34682 0.30469 0.26785 0.23560 0.20737 0.18263 16093 28 0.33348 0.29157 0.25509 0.22332 0.19563 0.17148 0.15040 29 0.32065 0.27902 0.24295 0.21168 0.18456 0.16101. 0.14056 30 0.30832 0.26700 0.23138 0.20064. 0.17411. 0.15119 0.13137 31 0.29646 0.25550 0.22036 0.19018 16425 14196 0.12277

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