explain step $1$

On March $1,$ year $1,$ Carter Corporation issued $\backslash (\backslash$$ $15,000,000\backslash )$ in bonds that mature in $10$ years. The bonds have a coupon rate of $6\mathrm{.}3$ percent and pay interest on March $1$ and September $1.$ When the bonds were sold, the market rate of interest was $6$ percent. Carter uses the effective$-$interest method to amortize bond discount or premium. By December $31,$ year $1,$ the market interest rate had increased to $7$ percent.

Required:

$1.$ Record the issuance of the bond on March $1,$ year $1.$

$2.$ Compute the present value of the difference between the interest paid each six months $\backslash ((\backslash$$ $472,500)\backslash )$ and the interest demanded by the market $(\backslash (\backslash$$ $15\backslash )$ million $\backslash (\backslash$times $6\backslash \%\backslash$times $6/12=\backslash$$ $450,000\backslash )).$ Use the market rate of interest and the $10-$year life of the bond in your present value computation. What does this amount represent? Explain.

$3.$ Record the payment of interest on September $1,$ year $1.$

$4.$ Record the adjusting entry for accrued interest on December $31,$ year $1.$

$5.$ Why does interest expense change each year when the effective$-$interest method is used?

$6.$ Compute the present value of Carter's bonds, assuming that they had a $7-$year life instead of a $10-$year life. Compare this amount to the carrying amount of the bond at March $1,$ year $4.$ What does this comparison demonstrate?

$7.$ Determine the impact of the three transactions on the debt$-$to$-$equity ratio and the times interest earned ratio.