On January 1, 2016, Bishop Company issued 10% bonds dated January 1, 2016 with a ace amount of 1,000,000. The bonds mature in 2020 (5 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31.

Required:

1. determine the price of the bonds at January 1, 2016.

2. prepare the journal entry to record the bond issuance by Bishop on january 1, 2016.

3. prepare the journal entry to record intrest on june 30 2016, using the straight line method

4. prepare the journal entry to record intrest on december 31 2016 using the straight line method.