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On January 1, 2015 Astro World issues $20 million of 6% bonds with interest payable semiannually on June 30 and December 31 each year. Astro

World internds to use the funds to build the world's largest Astro avalance and the "tornado" - a giant outdoor vortex in which riders spin in

progressively smaller and faster circles until they drop through a small tunnel at the bottom.

1. The bond issue price is $17,864,493 at a time when the market rate is 7%. Please answer the following:

a. Is the bond issued at a premium, a discount, or at par amount?

b. Prepare the entry on January 1, 2015 to record the issuance of the bond.

c. Prepare an amortization schedule to show the amortization over the life of the bond. What is the time to maturity for the bond?

(Begin the amorization schedule in column S, row 1)

d. Prepare the entry to record the interest payments for June 30, 2020 and December 31, 2020.

e. How much is the total amount of premium or discount?

f. How much interest did White Astro pay over the life of the bond?

g. How much interest expense did White Astro recognize over the life of the bond?

h. What is the difference between the cash paid for interest and the interest expense?

Is this the same as the premium/discount?

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