Calculations Marketing Inc. issued 10.5% bonds with a par value of $350,000 and a five-year life on January 1, 2020, for $356,757. The bonds pay interest on June 30 and December 31. The market interest rate was 10% on the original issue date. Use TABLE 14A.1 and TABLE 14A.2.

b. Show the journal entries that Calculations Marketing Inc. would make to record the first two interest payments assuming a December 31 year-end.

c. Use the original market interest rate to calculate the present value of the remaining cash flows for these bonds as of December 31, 2022. Compare your answer with the amount shown on the amortization table as the balance for that date. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)

2. Prepare an amortization table using the effective interest method. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) Answer is complete but not entirely correct. Period Ending Cash Interest Paid Period Interest Expense Premium Amort. Unamortized premium Carrying Value $ 6,757 356,757 Jan. 1/20 June 30/20 Dec. 31/20 18,375 17,838 537 6,220 356,220 18,375 17,811 564 5,656 355,656 June 18,375 17,783 592 5,064 355,064 18,375 17,753 622 4,442 354,442 18,375 17,722 653 3,789 353,789 18,375 17,689 685 3,074 353,074 30/21 Dec. 31/21 June 30/22 Dec. 31/22 June 30/23 Dec. 31/23 June 30/24 Dec. 31/24 Totals 18,375 17,654 720 2,354 352,354 18,375 17,618 756 1,598 351,598 18,375 17,580 793 805 350,805 18,375 17,540 833 (28) 349,972 $ 183,750 $ 176,988 $ 6,755