On January 1, 2013, Piper Co. issued ten-year bonds with a face value of $4,000,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are:

Present value of 1 for 10 periods at 10%............................ .386

Present value of 1 for 10 periods at 12%............................ .322

Present value of 1 for 20 periods at 5%.............................. .377

Present value of 1 for 20 periods at 6%.............................. .312

Present value of annuity for 10 periods at 10%................... 6.145

Present value of annuity for 10 periods at 12%................... 5.650

Present value of annuity for 20 periods at 5%.................... 12.462

Present value of annuity for 20 periods at 6%.................... 11.470

(a) Calculate the issue price of the bonds.

(b) Without prejudice to your solution in part (a), assume that the issue price was $3,536,000. Prepare the amortization table for 2013, assuming that amortization is recorded on interest payment dates