Ben Norton issued $ 700,000 of 5%, 10-year bonds payable on January 1, 2014. The market interest rate at the date of issuance was 4%, and the bonds pay interest semiannually.

Requirements

1. How much cash did the company receive upon issuance of the bonds payable? (Round all numbers to the nearest whole dollar.)

2. Prepare an amortization table for the bond using the effective-interest method, through the first two interest payments. (Round all numbers to the nearest whole dollar.)

3. Journalize the issuance of the bonds on January 1, 2014, and payment of the first semiannual interest amount and amortization of the bond on June 30, 2014. Explanations are not required.