Bonds Payable

On January 1, 2022, Midwest Corporation issued $800,000, 6%, 14-year bonds, with semi-annual interest payments. Midwest will pay interest on July 1 and January 1. The bonds were issued to yield an effective rate of 8%.

Instructions:

(a) Compute the proceeds of the bond issue.

(b) Prepare the first four lines of a bond amortization table.

(c) Prepare all necessary journal entries related to the bond issue for Midwest from issuance (sale) of the bonds through the first two interest payments.