Analyzing and Reporting Financial Statement Eects of Bond Transactions (FSET) On January 1, Trueman Corp. issued $400,000 of 20-year, 11% bonds for $369,907, yielding a market (yield) rate of 12%. Interest is payable semiannually on June 30 and December 31.

a. Conrm the bond issue price.

b. Record the bond issuance, semiannual interest payment, and discount amortization on June 30, and semiannual interest payment and discount amortization on December 31, using the nancial statement eects template. Use the eective interest rate method.

c. Trueman elected to report these bonds in its nancial statements at fair value. On December 31, these bonds were listed in the bond market at a price of 101 (or 101% of par value). Using the nancial statement eects template, record the entry to adjust the reported value of these bonds to fair value.

d. Prepare a table summarizing the eect of these bonds on earnings for the year.