1)

ABC Plc. issued 6% bonds on January 1, 2012, with a principal amount of $600,000, the market yield for bonds similar risk and maturity was 8%. THE BONDS MATURE December 31, 2015 (4 years) interest is paid semiannually on June 30 and December 31.

Required:

a) Determine the price of the bonds on January 1, 2012.

b) Prepare the journal entry to record their issuance by ABC Plc. On January 1, 2012.

c) Prepare a amortization schedule that determines interest at the effective rate each period.

d) Prepare journal entries to record interest on June 30, 2012 and December 31, 2012.