On December 31, 2014, when the market interest rate is 6%, O’Brien Realty issues $ 800,000 of 7.25%, 10-year bonds payable. The bonds pay interest semiannually. O’Brien Realty received $ 874,662 in cash at issuance.

Requirements

1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods. (Round all numbers to the nearest whole dollar.)

2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments.