A company issued the following semi-annual bonds:

Face amount: $80,000

Coupon rate: 8%

Yield: 6%

Life: 20 years

a. Compute the selling price of the bonds.

2. Prepare the journal entry for the issuance of the bonds using the selling price from part (a).

c. Prepare the amortization schedule for only the first two interest periods using the interest

method.

CASH INTEREST EXPENSE AMORTIZATION BOOK VALUE

d. Prepare the journal entry to record the first interest payment on the bonds using the

schedule completed in part (c).