ANSWER FOR QUESTION 1 AND 2:

QUESTION 3 AND 4:

Date Int. Paid Int. Exp. Disc. Amort. Carrying amount

Jan. 1, 2018 4,430,000
June 30, 2018 250,000 265,800 15,800 4,445,800
Dec. 31, 2018 250,000 266,748 16,748 4,462,548

QUESTION 5 AND 6:

QUESTION 7.

Accrued interest payable from Oct. 1 to Dec. 31, 2015

(8,000,000 x 8% x 3/12) = 160,000

QUESTION 8.

Interest expense (5,675,000 x 8%) 454,000

Interest paid (5,000,000 x 10%) 500,000

Premium amortization for 2015 46,000

Premium on bonds payable 675,000

Premium amort. For 2015 (46,000)

Premium on BP- Dec. 31, 2015 629,000

QUESTION 9.

Loss on extinguishment (8,160,000 – 7,360,000) 800,000

QUESTION 10.

Issue price (4,000,000 x 103%) 4,120,000

Accrued interest from Jan. 1 to Mar. 1, 2015

(4,000,000 x 9% x 2/12) 60,000

Total 4,180,000

Less: Bond issue cost 200,000

Net cash received from bond issuance 3,980,000