Information taken from a Sears, Roebuck and Company annual report follows December 31 Long Term Debt ($ in millions) Year 2 Year 1 7 debentures, $300 million face value, due Year 11, effective rate $14 6 $ 188 6 $ 182 7 Zero coupon bonds, $500 million face value, due Year 8, effective rate 12 0 267...

Information taken from a Sears, Roebuck and Company annual report follows. December 31 Long-Term Debt ($ in

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Question:

Information taken from a Sears, Roebuck and Company annual report follows.

	December 31
Long-Term Debt ($ in millions)	Year 2	Year 1
7% debentures, $300 million face value, due Year 11, effective rate $14.6%	$ 188.6	$ 182.7
Zero coupon bonds, $500 million face value, due Year 8, effective rate 12.0%	267.9	239.2
Participating mortgages, $850 million face value, due Year 5, effective rate 8.7%, collateralized by Sears Tower and related properties	834.5	833.9
Various other long-term debt	12,444.2	16,329.2
Total long-term debt	$13,735.2	$17,585.0

Required:

1. How much interest expense did the company record during Year 2 on the 7% debentures? How much of the original issue discount was amortized during Year 2?

2. How much interest expense did the company record during Year 2 on the zero coupon bonds?

3. Suppose that interest payments on the participating mortgages are made on December 31 of each year. What journal entry did the company make in Year 2 to recognize interest expense on this debt?

4. How much cash interest did the company pay out during Year 2 on the 7% debentures and the zero coupon bonds?