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Abbot Corporation is a real estate developer looking to build a new property in the Metro Vancouver area. In order to do so$,$ they need to raise capital to finance the construction. The company has investigated two alternatives:

Issue $$93\mathrm{.}5$ million $10-$year bonds, with an $8\%$ coupon per annum. The company can buy them back on the open market at the end of $5$ years; analysts estimate that it would cost $$100,000,000$ to reacquire the $$93\mathrm{.}5$ million dollar issue. The market rate is $6\mathrm{.}5\%.$

Issue $$93\mathrm{.}5$ million of preferred shares at par. The shares can be redeemed at the company$$s option at the end of $5$ years for a price estimated to be in the region of $$98,000,000.$ Annual $($cumulative$)$ dividends are set at $6\mathrm{.}75\%.$

Required:

$1.$ Provide journal entries to record issuance, annual dividends, or interest $($for one year only$)$ of both the shares and debt. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.$)$

$2.$ Assume Abbot$$s tax rate is $30\%.$ What is the after$-$tax annual cost of the various alternatives?m$.$

Provide journal entrles to record issuance, annual dividends, or Interest $($for one year only$)$ of both the shares and debt. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Do not round intermedlate calculations. Round your final answers to the nearest whole dollar amount.$)$

Assume Abbot's tax rate is $30\%.$ What is the after$-$tax annual cost of the varlous alternatives?

$\backslash$table$[[$After$-$tax annual cost for bonds$],[$After$-$tax annual cost for preferred shares$]]$

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