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:

1. Compute the selling price of the bonds. 3 PUNTOS

2. Prepare the entry to record the sale of the bonds. 3 PUNTOS

3. Prepare the amortization table for the bonds. 5 PUNTOS

4. Prepare the journal entries for the first annual interest payment and the final repayment of the bonds. 5 PUNTOS