A Company Issued 10%, 5-Year Bonds with a Par Value

question 105

Essay

A company issued 10%, 5-year bonds with a par value of $2,000,000, on January 1. Interest is to be paid semiannually each June 30 and December 31. The bonds were sold at $2,162,290 based on an annual market rate of 8%. 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 journal entry to record the first semiannual interest payment.

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Definitions:

Forced Abortions

Abortions that are carried out without the consent of the pregnant individual, often under coercion or as a matter of policy.

One-Child Policy

A population control policy of China, implemented from 1979 to 2015, which limited many families to only one child in an effort to curb rapid population growth.

Urban Areas

Densely populated regions characterized by significant human settlement and infrastructure, such as cities and towns, where economic, cultural, and social activities are concentrated.

North American Population

The total number of people residing in North America, encompassing countries like Canada, the United States, and Mexico.