Needs Bucks Company issues bonds payable on January 1, 2020. The bonds go for 3 years. Interest payments will be made twice a year on June 30 and December 31 (think about twice a year). The stated (coupon) interest rate is 4%. The market (effective) interest rate is 6%. The face value (principal amount) is $10,000,000.

1. Compute the present value of the cash flows, which is the same as the issue price for the bonds payable

***Requirements:

Use a Financial Calculator or Exceland show the inputs that you are using for each calculation

And show each cash flow separately, then add together

2. Prepare an amortization for the life of the bonds.

***Requirement:

It is preferable to use Excel, but if you choose not to, prepare a table in Word (no hand-written tables)

think about twice a year

3. Prepare the journal entries for the first year.