Preparing a Bond Amortization Table (Effective Interest Rate)}

Pennington Corporation issued five-year, \(8.6 \%\) bonds with a total face value of \(\$ 700,000\) on December 31, 2018, for \(\$ 680,000\). 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 bond issuance and the interest payments made on June 30, 2019, and December 31, 2019.

\section*{Problem