Arbuckle Ltd. issued $80,000 of four-year, 7% bonds dated 1 December 20X5. Interest is payable semi-annually on 31 May and 30 November. The bonds were issued on 1 February 20X6. The effective interest rate was 8%.

Required:

1. Calculate the present value of the bond assuming that it had been issued on 1 December 20X5.

2. Prepare a bond amortization schedule. Use the effective-interest method of amortization.

3. Calculate the proceeds of the bond reflecting the fact that it was issued on 1 February 20X6. Also calculate the accrued interest.

4. Based on your calculations in (3), how much amortization is included in interest expense for the period ended 31 May 20X6?