On January 1, 2018, Mill Road Corporation issued $300,000 par value, 5%, 5-year bonds, interest is payable

Question:

On January 1, 2018, Mill Road Corporation issued $300,000 par value, 5%, 5-year bonds, interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the period on July 1, 2018. The market rate of interest on the date of the bond issue was&%. The company's fiscal year ends on December 31.

Required

a. Determine the issue price of the debt.

b. Prepare the amortization table for the bond issue assuming that Mill Road uses the effective interest rate method of amortization.

c. Prepare the journal entries to record the bond issue, the first interest entry, and payment of the bonds at maturity. Assume that the company uses a premium or discount account if needed.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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