Amortization of Bond Discount On J anuary |, Zond Corporation issues $600,000 par value bonds with a 4- year maturity; 6 percent stated interest rate; and an effective interest rate of 8 percent. Interest is paid annually on Decem- ber 31. Assuming the effective-interest method of amortiza- tion is used in computing interest expense:

a. Compute the amount Zond Corporation will receive at the time the bonds are issued.

b. What amount of interest expense will Zond report for the first year?

c. What amount of interest expense will Zond report for the second year?

d. Prepare a bond interest and amortization table for the life of the bonds, as illustrated in Exhibit 11-5.