Mathieson Co. issues a $10,000,000, 6 % bond on 1 October 20X4. At this time, market

Mathieson Co. issues a $10,000,000, 6 ½ % bond on 1 October 20X4. At this time, market interest rates are in the range of 6%. The bond had a 10-year life from 1 October 20X4, and paid interest semi-annually on 31 March and 30 September.

Required:
1. Calculate the proceeds that would be raised on bond issuance.
2. Prepare an amortization table using the effective interest method of amortization. Complete the first four payments only.
3. Prepare journal entries for 20X4 and 20X5, using the effective interest method. ABC has a 31 December fiscal year-end.