Master Wagon issued $100,000, 5 year bond on January 1, 2018 paying 4% interest on a semi-annual basis every January 1 and July 1.

Instructions prepare the first-year journal entries for the bond issue and interest expense assuming that the company uses the effective interest method, a market interest rate of 6% and has a year-end of December 31, 2018.

Use a financial calculator or the tables above.

TABLE 1: PRESENT VALUE OF $1 PV 1 (1 + i)" 4% 5% (n) Periods 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1% 1.5% 2% 2.5% 3% 3.5% 4.5% 6% 7% 8% 9% 10% 0.99010 0.98522 0.98039 0.97561 0.97087 0.96618 0.96154 0.95694 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.98030 0.97066 0.96117 0.95181 0.94260 0.93351 0.92456 0.91573 0.90703 0.89000 0.87344 0.85734 0.84168 0.82645 0.97059 0.95632 0.94232 0.92860 0.91514 0.90194 0.88900 0.87630 0.86384 0.83962 0.81630 0.79383 077218 0.75131 0.96098 0.94218 0.92385 0.90595 0.88849 0.87144 0.85480 0.83856 0.82270 0.79209 0.76290 0.73503 0.70843 0.68301 0.95147 0.92826 0.90573 0.88385 0.86261 0.84197 0.82193 0.80245 0.78353 0.74726 0.71299 0.68058 0.64993 0.62092 0.94205 0.91454 0.88797 0.86230 0.83748 0.81350 0.79031 0.76790 0.74622 0.70496 0.66634 0.63017 0.59627 0.56447 0.93272 0.90103 0.87056 0.84127 0.81309 0.78599 0.75992 0.73483 0.71068 0.66506 0.62275 0.58349 0.54703 0.51316 0.92348 0.88771 0.85349 0.82075 0.78941 0.75941 0.73069 0.70319 0.67684 0.62741 0.58201 0.54027 0.50187 0.46651 0.91434 0.87459 0.83676 0.80073 0.76642 0.73373 0.70259 0.67290 0.64461 0.59190 0.54393 0.50025 0.46043 0.42410 0.90529 0.86167 0.82035 0.78120 0.74409 0.70892 0.67556 0.64393 0.61391 0.55839 0.50835 0.46319 0.42241 0.38554 0.89632 0.84893 0.80426 0.76214 0.72242 0.68495 0.64958 0.61620 0.58468 0.52679 0.47509 0.42888 0.38753 0.35049 0.88745 0.83639 0.78849 0.74356 0.70138 0.66178 0.62460 0.58966 0.55684 0.49697 0.44401 0.39711 0.35553 0.31863 0.87866 0.82403 0.77303 0.72542 0.68095 0.63940 0.60057 0.56427 0.53032 0.46884 0.41496 0.36770 0.32618 0.28966 0.86996 0.81185 0.75788 0.70773 0.66112 0.61778 0.57748 0.53997 0.50507 0.44230 0.38782 0.34046 0.29925 0.26333 0.86135 0.79985 0.74301 0.69047 0.64186 0.59689 0.55526 0.51672 0.48102 0.41727 0.36245 0.31524 0.27454 0.23939 0.85282 0.78803 0.72845 0.67362 0.62317 0.57671 0.53391 0.49447 0.45811 0.39365 0.33873 0.29189 0.25187 0.21763 0.84438 0.77639 0.71416 0.65720 0.60502 0.55720 0.51337 0.47318 0.43630 0.37136 0.31657 0.27027 0.23107 0.19784 0.83602 0.76491 0.70016 0.64117 0.58739 0.53836 0.49363 0.45280 0.41552 0.35034 0.29586 0.25025 0.21199 0.17986 0.82774 0.75361 0.68643 0.62553 0.57029 0.52016 0.47464 0.43330 0.39573 0.33051 0.27651 0.23171 0.19449 0.16351 0.81954 0.74247 0.67297 0.61027 0.55368 0.50257 0.45639 0.41464 0.37689 0.31180 0.25842 0.21455 0.17843 0.14864 TABLE 2: PRESENT VALUE OF AN ANNUITY OF $1 (1 + i)" PV (n) Periods 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1% 1.5% 2% 2.5% 3% 3.5% 4% 4.5% 5% 6% 7% 8% 9% 10% 0.99010 0.98522 0.98039 0.97561 0.97087 0.96618 0.96154 0.95694 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 1.97040 1.95588 1.94156 1.92742 1.91347 1.89969 1.88609 1.87267 1.85941 1.83339 1.80802 1.78326 1.75911 1.73554 2.94099 2.91220 2.88388 2.85602 2.82861 2.80164 2.77509 2.74896 2.72325 2.67301 2.62432 2.57710 2.53129 2.48685 3.90197 3.85438 3.80773 3.76197 3.71710 3.67308 3.62990 3.58753 3.54595 3.46511 3.38721 3.31213 3.23972 3.16987 4.85343 4.78264 4.71346 4.64583 4.57971 4.51505 4.45182 4.38998 4.32948 4.21236 4.10020 3.99271 3.88965 3.79079 5.79548 5.69719 5.60143 5.508135.41719 5.32855 5.24214 5.15787 5.075694.91732 4.76654 4.62288 4.48592 4.35526 6.72819 6.59821 6.47199 6.34939 6.23028 6.11454 6.00205 5.89270 5.78637 5.58238 5.38929 5.20637 5.03295 4.86842 7.65168 7.48593 7.32548 7.17014 7.01969 6.87396 6.73274 6.56589 6.46321 6.20979 5.97130 5.74664 5.53482 5.33493 8.56602 8.36052 8.16224 7.97087 7.78611 7.60769 7.43533 7.26879 7.10782 6.80169 6.51523 6.24689 5.99525 5.75902 9.47130 9.22218 8.98259 8.75206 8.53020 8.31661 8.11090 7.91272 7.72173 7.36009 7.02358 6.71008 6.41766 6.14457 10.36763 10.07112 9.78685 9.51421 9.25262 9.00155 8.76048 8.52892 8.30641 7.88687 7.49867 7.13896 6.80519 6.49506 11.25508 10.90751 10.57534 10.25776 9.95400 9.66333 9.38507 9.11858 8.86325 8.38384 7.94269 7.53608 7.16073 6.81369 12.13374 11.73153 11.34837 10.98318 10.63496 10.30274 9.98565 9.68285 9.39357 8.85268 8.35765 7.90378 7.48690 7.10336 13.00370 12.54338 12.10625 11.69091 11.29607 10.92052 10.56312 10.2283 9.89864 9.29498 8.74547 8.24424 7.78615 7.36669 13.86505 13.34323 12.84926 12.38138 11.93794 11.51741 11.11839 10.73955 10.37966 9.71225 9.10791 8.55948 8.06069 7.60608 14.71787 14.13126 13.57771 13.05500 12.56110 12.09412 11.65230 11.23402 10.83777 10.10590 9.44665 8.85137 8.31256 7.82371 15.56225 14.90765 14.29187 13.71220 13.16612 12.65132 12.16567 11.70719 11.27407 10.47726 9.76322 9.12164 8.54363 8.02155 16.39827 15.67256 14.99203 14.35336 13.75351 13.18968 12.65930 12.15999 11.68959 10.82760 10.05909 9.37189 8.75563 8.20141 17.22601 16.42617 15.67846 14.97889 14.32380 13.70984 13.13394 12.59329 12.08532 11.15812 10.33560 9.60360 8.95011 8.36492 18.04555 17.16864 16.35143 15.58916 14.87747 14.21240 13.59033 13.00794 12.46221 11.46992 10.59401 9.81815 9.12855 8.51356