Question

Water Way Company is considering raising additional capital for further expansion. The company wants to finance a new business venture into guaded rip down the Amazon River in South America Additionally, the company wants to add other building on her and to offer more services for local customers Citicon loving the financing information) Requirement 1. W e bonds issue , a premium or a discount? Wwer Way's bonds will be issued at because Requirement 2. Record the following transactions include dates and round to the newest dolor O p tionsRound you to the whole record de first the credits Exclude ons om any ouma # Cheved to rebond Accounts 0 More Info Credit Ww Way Company plan to r 2020. The body 37.200 when the border a e ally is lone 100,000 of four year bonds on January 2 and December 31. The company receives The company wilt for wy amongage payabio .000 2.2020. The proceed to the on new The more re p ay of 120.000 s payable on December 31. The mortgage rates . C ecived from the morgage payable Credit Print [ Dono Choose from any o n any number in the input folds and then continue to the next question

Answer 1

1. The bonds are issued at discount since the money received is less than the face value of the bonds

2.

Transaction	Date	Accounts	Debit	Credit
a	Jan 2 ,2020	Cash	790200
		Discounts on bonds payable	9,800
		Bonds payable		800,000
b	Jan 2 ,2020	Cash	400,000
		Mortgage payable		400,000
c1	June 30, 2020	Interest expense	29225
		Discounts on bonds payable [9800/ (4years*2)]		1225
		Cash [800,000*7%*1/2]		28000
c2	Dec 31,2020	Interest expense	29225
		Discounts on bonds payable [9800/ (4years*2)]		1225
		Cash [800,000*7%*1/2]		28000
d	Dec 31,2020	Mortgage payable	400,000
		Interest expense [400,000*7%]	28000
		Cash		428000

3.

	Total 2020 Interest expense
Bonds	58450
Mortgage	28000
Total	86450