On January 1, 2013, Roosevelt Company issued 12% bonds, having a maturity value of $500,000. The bonds provide the bondholders with a 10% yield, and mature on 1 January, 2018, with interest receivable on 31 December of each year. Roosevelt Company uses the effective-interest method to allocate unamortized discount or premium. The reporting date of Roosevelt Company is 31 December.

Required:

(a) Prepare the journal entry at the bond issuing day.

(b) Prepare a bond amortization schedule.

(c) Prepare the journal entry to record the interest received and the amortization for 2013.