On December 31, 2016, when the market interest rate is 10%, Timmony Realty issues $450,000 of 7.25%, 10-year bonds payable. The bonds pay interest semiannually. The present value of the bonds at issuance is $372,936.
Requirements
1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods.
2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments.