Bond issue price and premium amortization

On January 1, 2013, Piper Co. issued ten-year bonds with a face value of $4,000,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are:

Present value of 1 for 10 periods at 10%..................	.386
Present value of 1 for 10 periods at 12%..................	.322
Present value of 1 for 20 periods at 5%....................	.377
Present value of 1 for 20 periods at 6%....................	.312
Present value of annuity for 10 periods at 10%.........	6.145
Present value of annuity for 10 periods at 12%.........	5.650
Present value of annuity for 20 periods at 5%...........	12.462
Present value of annuity for 20 periods at 6%...........	11.470

Instructions

(a) Calculate the issue price of the bonds.

(b) Without prejudice to your solution in part (a), assume that the issue price was $3,536,000. Prepare the amortization table for 2013, assuming that amortization is recorded on interest payment dates.