Question
First Place Ltd. is authorized to issue $6,250,000 of 8 percent, 10-year bonds. On January 2, 2020, the contract date, when the market interest rate
First Place Ltd. is authorized to issue $6,250,000 of 8 percent, 10-year bonds. On January 2, 2020, the contract date, when the market interest rate is 10 percent, the company issues $5,000,000 of the bonds and receives cash of $4,376,889.Interest is paid on June 30 and December 31 each year. Required 1. Prepare an amortization table for the first four semi-annual interest periods. First Place Ltd. amortizes bond discounts by the effective-interest method. 2. Record the issue of bonds on January 2, the first semi-annual interest payment on June 30, and the second payment on December 31. 3. Show the balance sheet presentation of the bond on the date of issue and on December 31, 2021
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