On November 1, 2018, Natalia Corporation issued $200,000 8% four year bonds, where interest is payable semi-annually on April 30 and October 31. The bonds were dated November 1, 2018 and mature on November 1, 2022. The accounting period ends on December 31. The market rate on date of issue was 10%.

1. Calculate the proceeds of the bond (price) on November 1, 2018.

2. Prepare a full amortization schedule using the effective-interest method of amortization, starting your schedule at November 1, 2018.

3. Provide all Journal entries required for the years 2018 and 2019, starting with the Bond issue on November 1, 2018. (HINT: Prepare entries for the initial issue, for the semi-annual interest payments and for the year end accruals.)

4. Assuming that on March 1, 2020 that 40% of the bonds are called in at a price of 104. Record the journal entries on March 1, 2020 to pay off the interest to these bondholders and to record the purchase. 5. What is the balance of the Bonds Payable on March 2, 2020 after the 40% bonds were repurchased? Show calculations