8pts

On January 1, 2020, Fields Corporation issued ten-year bonds with a par value of $2,000,000. The bonds pay interest semiannually onJune 30 and December 31 at an annual rate of 10%. The bonds were issued to yield 8% annually.

Fields Corporation has a fiscal year that ends August 31 each year. Fields Corporation uses the effective-interest method to calculate its interest expense each period.

Required:

1. Compute the issue price of the bonds and the journal entryat issuance.

2. Prepare the bond amortization table throughDecember 31, 2020.

3. Prepare the journal entry or entries associated with this bond onAugust 31, 2020.

PV of $1

Period

4%

5%

6%

8%

10%

12%

10

0.67556

0.61391

0.55839

0.46319

0.38554

0.32197

20

0.45639

0.37689

0.31180

0.21455

0.14864

0.10367

PV of an ordinary annuity of $1

Period

4%

5%

6%

8%

10%

12%

10

8.11090

7.72173

7.36009

6.71008

6.14457

5.65002

20

13.59033

12.46221

11.46992

9.81815

8.51356

4.86958