On May 1, 2016, Ezzy Corporation issued a 4-year bond worth $445,000 with an interest rate of 8% per annum. Interest is to be paid semi-annually on October 31 and April 30. At the time of the issuance, the market interest rate was 6%. Ezzy Corporation amortizes any premium or discount using the effective interest method.

Calculate the bond issue price and the resulting premium or discount. Do not enter dollar signs or commas in the input boxes. Round your answers to the nearest whole number. For transactions with more than one debit or credit, enter the accounts in alphabetical order. For bond calculations, use the PV tables in Appendix II of the textbook. Bond Issue Price: $Answer Premium or Discount: $Answer b) Prepare journal entries to record the following bonds payable transactions. 1) Issuance of bonds on May 1, 2016.

Date	Account Title and Explanation	Debit	Credit
May 1	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	To record bond issuance

2) Payment of interest and amortization of premium or discount on October 31, 2016.

Date	Account Title and Explanation	Debit	Credit
Oct 31	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	To record first payment of interest and amortization

3) Accrual of interest and amortization of premium or discount on December 31, 2016, which is the company's year-end.

Date	Account Title and Explanation	Debit	Credit
Dec 31	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	To record the interest accrued on bonds payable

4) Payment of interest and amortization of premium or discount on April 30, 2017.

Date	Account Title and Explanation	Debit	Credit
Apr 30	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	To record payment of interest and amortization

5) Redemption of the bond for its face value one year before maturity on May 1.

Date	Account Title and Explanation	Debit	Credit
May 1	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon SharesCost of Goods SoldDiscount on BondsGain on Sale of BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryLoss on Sale of BondsPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	Redemption of bond