Foster incorporated sold $500,000 of 10% bonds on January 1,2019 for a price that yields a 12% interest rate. The bonds pay interest semi annually on June 30 and December 31. The bonds are due December 31,2023. Foster uses the effective interest method.

Instructions in picture

Problem 3 (30 Points) Foster Incorporated sold $500,000 of 10% bonds on January 1, 2019 for a price that yields a 12% interest rate. The bonds pay interest semi-annually on June 30 and December 31, The bonds are due December 31, 2023. Foster uses the effective interest method Instructions: 1. Determine the selling price of the bonds on January 1, 2019. 2. Prepare an amortization schedule using the effective interest method. 3. Prepare the journal entries for 2019. 4. Assume the company reacquired the bonds on July 1, 2022, at 104 and prepare journal entry to record the retirement of the bonds. 5. Assume Foster Incorporated used the straight-line method to amortize the premium or discount. Prepare the journal for June 30, 2019 to record interest expense