A Company Issued 10%,five-Year Bonds with a Par Value of $2,000,000,on

question 147

Essay

A company issued 10%,five-year bonds with a par value of $2,000,000,on January 1,2013.Interest is to be paid semiannually each June 30 and December 31.The bonds were sold at $2,162,290 to yield the buyers an 8% annual return.The company uses the effective interest method of amortization.
(1) Prepare an amortization table for the first two semiannual payment periods using the format shown below.
(2) Prepare the general journal entry to record the first semiannual interest payment.

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Definitions:

Rate of Return

A measure of the gain or loss on an investment over a specified period, typically expressed as a percentage of the investment's cost.

Census Conducted

Refers to the systematic collection, analysis, and publication of demographic, economic, and social data pertaining to all individuals in a particular area at a specified time.

Minority Groups

Communities or populations that differ in race, religion, or national origin from the dominant group and are often subject to differential treatment.

United States Census

A decennial count required by the U.S. Constitution that records the number of people living in the United States, as well as demographic information, used for political representation and federal funding allocation.