Bond Retirement Problem #2

On January 1, 2015, Epson Co. issued 10-year bonds with a face value of $5,000,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%.

a.Calculate the issue price of the bond in dollars

b.Calculate the issue price of the bonds as a percentage

c.Make the journal entry to record the issuance of the bond on January 1, 2015

d.Prepare the amortization table for the years 2015, 2016 & 2017

e.Make the journal entries for 2017

f.How much was the interest expense for 2017?

g.On December 31, 2017 $400,000 of the bonds were retired at 95.Make the journal entry to record the retirement.