Standard Autoparts Inc. issued ($ 100,000) of (7 %, 10)-year bonds at a price of 87 on

Question:

Standard Autoparts Inc. issued $\$ 100,000$ of $7 \%, 10$-year bonds at a price of 87 on January 31, 2020. The market interest rate at the date of issuance was $9 \%$, and the standard bonds pay interest semi-annually.

1. Prepare an effective-interest amortization table for the bonds through the first three interest payments. Use Exhibit 7-3, page 353, as a guide, and round amounts to the nearest dollar.

2. Record Standard's issuance of the bonds on January 31, 2020, and payment of the first semi-annual interest amount and amortization of the bonds on July 31, 2020. Explanations are not required.

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