On January 1, 2018, Reyes Company issued 5-year, $600,000, with an 8% stated rate. The market rate for other similar instruments was 10%.The bonds pay interest semi-annually each July 1 and January 1.

Required:

1.Using the time value of money tables, determine the price of the bonds. (Note: You MUST show all calculations using Time Value of Money tables. I will not accept answers that were derived using Excel formulas or online tables.

2.M a k e a bond amortization table, showing the semi-annual interest payments, the interest expense and the carrying value of the bond for all five years.

3.On July 1, 2021, Reyes retired the bonds at 98 (meaning 98% of face value). Determine the gain or loss on retirement of the bonds. You MUST show your calculations.