On January 1, 2017, Michelin Company issued 12% 5 year bonds dated January 1, 2017, with a face amount of $20 million. The bonds pay interest semi-annually and mature on December 31, 2021 after 5 years. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31.

Required:

1) Determine the price of the bonds at January 1, 2017.

2) Prepare the bond amortization schedule using the straight line method.