Preparing a Bond Amortization Table (Effective Interest Rate)}

OBJECTIVE 3

Babur Company issued five-year, \(7.5 \%\) bonds with a total face value of \(\$ 900,000\) on December 31, 2018, for \(\$ 950,000\). The bonds pay interest on June 30 and December 31 of each year. The company uses the effective interest rate method of amortization.

\section*{Required:}

1. Prepare an amortization table using the effective interest rate method.

2. Prepare the entries to recognize the interest payments made on June 30, 2019, and December 31, 2019.

\section*{Problem