On January 1, 2020, XYZ Company issued 8-year bonds with a face value of 1,500,000 and a stated (nominal) interest rate of 6% payable semiannually on June 30 and December 31. The bonds were sold to yield 4%.

Instructions:

a. Calculate the selling price of the bonds payable. HINT: You will need to look up the appropriate discount value in the present value tables.

b. Prepare the interest amortization table for 2020 only assuming the amortization is recorded on interest payment dates