Bonds Payable Are Dated January 1,2017,and Are Issued on That

question 85

Essay

Bonds payable are dated January 1,2017,and are issued on that date.The face value of the bonds is $200,000,and the face rate of interest is 8%.The bonds pay interest semiannually.The bonds will mature in five years.The market rate of interest at the time of issuance was 6%.
Required
1.What is the bond issuance price?
2.Using the effective interest amortization method,what amount should be amortized for the first six-month period? What amount of interest expense should be reported for the first six-month period?
3.Using the effective interest amortization method,what amount should be amortized for the period from July 1 to December 31,2017? What amount of interest expense should be reported for the period from July 1 to December 31,2017?

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