Obviously Corporation Inc., is considering the sale of Option A $500,000 bond issue. The bond pays semiannual interest of $25,000 and is due in 10 years. Option A bond issue date is January 1, 2015. Interest payment dates are June 30 and December 31. The bonds are sold to yield 12%.

Table Values are as follows:

Present value of 1 for 10 periods at 10% ...........0.38554

Present value of 1 for 10 periods at 12%.........0.32197

Present value of 1 for 20 periods at 5%............0.37689

Present value of 1 for 20 periods at 6%.................0.31180

Present value of annuity for 10 periods at 10%................6.14457

Present value of annuity for 10 periods at 12%...........5.65022

Present value of annuity for 20 periods at 5%............12.46221

Present value of annuity for 20 periods at 6%...........11.46992

1). Calculate the selling price of Option A bond issue in dollars. Show your work.

2). Calculate the selling price of Option A bond issue as a percentage.

3) Prepare the journal entry to record the bond issue.

4) Prepare the amortization schedules for the bond issue for years 2015 and 2016 using the effective interest method.

5) Prepare journal entries to record the interest expense for calendar year 2016.

6) On January 1, 2017 Obvious retired 60% of the bond @ 90. Calculate the gain or loss on the retirement.

7) Prepare the journal to record the bond retirement