5. Bonds Payable

On January 1, 2019, Iowa Corporation issued $600,000, 6%, 12-year bonds, with semi-annual interest payments. Nebraska will pay interest on July 1 and January 1. The bonds were issued to yield an effective rate of 8%.

Instructions:

(a) Compute the proceeds of the bond issue.

(b) Prepare a bond amortization table for 2019 through 2020.

(c) Prepare all necessary journal entries related to the bond issue for Iowa from issuance (sale) of the bonds through the first two interest payments.