1.Bond interest and amortization

Facts:

George Hull Corporation issued $8,000,000 of 8% bonds on October 1, 2020, due on October 1, 2025.

Interest is to be paid twice a year on April 1 and October 1.

The bonds were sold to yield 10% effective annual interest.

George Hull Corporation closes its books annually on December 31.

Instructions:

(a) Calculate the proceeds received upon issuance of the bonds.

(b) Make an amortization schedule (Round all answers to the nearest dollar.) Use the effective- interest method.

(c) Make the required journal entry at December 31, 2020.

(d) Compute the interest expense to be reported in the income statement for the year ended December 31, 2021