Investment in Debt Securities

On January $1,2023,$ Parsons Company purchased $8\%5-$year bonds, having a maturity value of $$600,000.$ The bonds provide the bond holders with a $6\%$ yield. They are dated January $1,2023,$ and mature on January $1,2028.$ Interest is receivable semi$-$annually on July $1$ and January $1$ of each year. Parsons uses the effective interest method to allocate unamortized discount or premium. Parsons plans to hold the bonds until maturity.

Instructions:

a$.$ Compute the amount Parsons paid for the bonds to receive a $6\%$ yield $($effective rate$).$ You must show your calculations and the table$($s$),n,$ and i used in your calculation.

b$.$ Use the information from $($a$)$ to prepare the first four lines of a bond amortization table.

c$.$ Prepare all necessary journal entries for $2023.$ The bonds have a market value of $$650,000$ on December $31,2023.$