1. On January 01, 2017, ASU Corporation issued $100,000 face-value bonds, with 7% interest payable at the end of year, that are due in 5 years. The current market interest rate for the bonds of the same rating is 5%.

1. Using the tables given, compute the selling price of the bonds as of January 01, 2017.

2. Complete the following amortization table using effective-interest method.

3. Prepare journal entries on each of the following dates.

1. 01/01/2017

2. 12/31/2017

3. 12/31/2021

2. On January 01, 2017, ASU Corporation issued $100,000 face-value bonds, with 6% interest payable at the end of year, that are due in 3 years. The current market interest rate for the bonds of the same rating is 8%.

1. Using the tables given, compute the selling price of the bonds as of January 01, 2017.

2. Complete the following amortization schedule using effective-interest method.

3. Prepare journal entries on each of the following dates.

1. 01/01/2017

2. 12/31/2017

3. 12/31/2018

4. 12/31/2019

Time Value of Money

Present Value of 1

Periods 3% 4% 5% 6% 7% 8%

3 .91514 .88900 .86384 .83962 .81630 .79383

5 .86261 .82193 .78353 .74726 .71299 .68058

6 .83748 .79031 .74622 .70496 .66634 .63017

Present Value of an Ordinary Annuity of 1

Periods 3% 4% 5% 6% 7% 8%

3 2.82861 2.77509 2.72325 2.67301 2.62432 2.57710

5 4.57971 4.45182 4.32948 4.21236 4.10020 3.99271

6 5.41719 5.24214 5.07569 4.91732 4.76654 4.62288