On January 1, 2023 Wildhorse Corp purchased a newly issued $1,075,000 bond. The bond matured on Dec 1, 2025 and paid interest at 6% every June 30 and Dec 31. The market interest rate was 8%. Wildhorses fiscal year-end is Oct 31, and the company had the intention and ability to hold the bond until its maturity date. The bond wil be accounted for using the amortized cost model.

a) Calculate the price paid using a financial calculator (please explain what steps are taken as I am having a problem here)

b) Prepare an amortization schedule for the bond (please show calculations)

c) Prepare the journal entries on the books for each of the following dates:

Jan 1, 2023

June 30 2023

October 31 2023

December 31, 2023

Two entries for Dec 31 2025 (one for interest and one for maturity of bond)

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