1. Manic Mining Company frequently invests in mining initiatives requiring large amounts of funding. As a result, it regularly sells bonds to raise cash.

   On May 1, 2020, when the market rate of interest was 5.50%, Manic sold $5,000,000 of 6.0% coupon, 5-year bonds. Interest is payable on May 1 and November 1. The bonds sold for a total of $5,108,000. Later in the year, on November 1, 2020, when the market rate of interest was 7.00%, Manic sold $5,000,000 of 6.0% coupon, 5-year bonds. Interest is payable on May 1 and November 1. These bonds sold for a total of $4,792,085.

   Manic uses the effective interest rate method to amortize bond premiums and accrete bond discounts.

   1. Prepare in good form the journal entry Manic must record upon the sale of each bond.

   2. Prepare the complete amortization/accretion schedule for each bond.

   3. What amount of interest expense on the two bonds will Manic recognize:

      1. in 2020?

      2. in 2021?

   4. What is the carrying value of each bond at December 31, 2023?

   5. Prepare in good form the journal entry Manic must record to record the payment of

      interest and principal upon each bonds maturity. In which section of the Statement of Cash Flows will each of these payment amounts appear?