On January 1, 2018, Bishop Company issued 10% bonds dated January 1, 2018, with a face amount of $20 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31.

Please use one set of the following factors for your calculation.

The PV of $1 (n=20, i=6%)=0.3118, PVA (n=20, i=6%)= 11.47

The PV of $1 (n=20, i=5%)=0.37689, PVA (n=20, i=5%)=12.4622.

Required:

1.	Determine the price of the bonds at January 1, 2018.

2.	Prepare the journal entry to record the bond issuance by Bishop on January 1, 2018.

3.	Prepare the journal entry to record interest on June 30, 2018, using the effective interest method.