On January 1, 2020, Phoenix Company purchased 8% 10-year bonds, having a maturity value of $500,000. The bonds provide the bond holders with an 6% yield. They are dated January 1, 2020, and mature on January 1, 2030. Interest is receivable semi-annually on July 1 and January 1 of each year. Phoenix uses the effective interest method to allocate unamortized discount or premium. Phoenix does not plan to hold the bonds until maturity and did not purchase them to sell in the near term.

Instructions:

1. Compute the amount Phoenix paid for the bonds to receive an 6% yield (effective rate). You must show your calculations and the table(s), n, and i used in your calculation. EXTRA CREDIT
2. Ignore your answer in (a). Assume that Phoenix paid $580,000 to earn an 6% yield. Prepare the first four lines of a bond amortization table.
3. Use the information in part b to prepare all necessary journal entries for 2020. The bonds have a market value of $565,000 on December 31, 2020.