On January 1, 2000, Audrey Corporation issued $100,000 of 10% coupon rate bonds to yield an effective rate of 12%. Interest is paid semiannually on June 30 and December 31. The bonds mature in five years, i.e., on January 1, 2005. Audrey incurred $10,000 in issuance costs and has a September 30^th fiscal year end.

Required:

1. Prepare the journal entry to record the bond issuance.

2. Prepare the amortization schedule for the entire bonds life (5 years).

3. Prepare the journal entries that Audrey Corporation would make on:

1. December 31, 2000.

2. June 30, 2001.

3. September 30, 2001.

4. Prepare Audreys Statement of Cash Flows for the fiscal year ended September 30, 2001.

5. Assume that on September 30, 2001 Audrey calls the bonds for 97. Prepare the journal entry to record the bond call.

6. Prepare Audreys Statement of Cash Flows for the fiscal year ended September 30, 2001 assuming the call took place.