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On January 1, 2020, Ellison Co. issued 8-year bonds with a face value of $5,000,000 (Five million) and a stated interest rate of 6%, payable

On January 1, 2020, Ellison Co. issued 8-year bonds with a face value of $5,000,000 (Five million) and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%.

a) Determine the issue price of the bond on January 1, 2020 and make the journal entry to record the sale. Is it sold at a discount or premium? b) Prepare the amortization table (using effective interest method) for 2020, 2021 and 2022. c) Make the journal entries to record buying back the bond on December 31, 2022 at the two different prices below and state whether each is a a gain or loss: i. $5,500000 (Five million, five hundred thousand) ii. $3,500000 (Three million five hundred thousand)

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