On January $2,$ Lincoln Motors, Inc. issued $1,000,$ $$1,000$ bonds to finance a new showroom. The bonds are $5-$year, $6\%$ bonds that pay interest on December $31$ each year. When issued, investors required $7\%$ interest and the bonds are due December $31,$ Year $5.$

Required:

Compute the selling price of the bonds.

Prepare the entry to record the sale of the bonds.

Prepare the amortization table for the bonds.

Prepare the journal entries for the first annual interest payment and the final repayment of the bonds.

Answer: