Question: On June 30, 2014, the market interest rate is 3.5%. First Base Sports Ltd. issues $4,000,000 of 412%, 20-year bonds payable. The bonds pay interest

On June 30, 2014, the market interest rate is 3.5%. First Base Sports Ltd. issues $4,000,000 of 41⁄2%, 20-year bonds payable. The bonds pay interest on June 30 and December 31. First Base Sports Ltd. amortizes bond premium by the effective-interest method.

Requirements
1. Use the PV function in Excel to calculate the issue price of the bonds.
2. Using Exhibit 9-7 as a model, prepare a bond amortization table for the term of the bonds.
3. Record the issuance of bonds payable on June 30, 2014; the payment of interest on December 31, 2014; and the payment of interest on June 30, 2015.

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Req 1 Using the PV function in EXCEL the issue price of the bonds is 4571885 Req 2 amortization table on next page Req 3 journal entries Journal DATE ... View full answer

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