Part A

On January $1,2022,$ East Pacific Enterprises issued $9\%,10-$year bonds with a face amount of $$1,350,000$ for cash $$1,265,880.$ Interest is payable semiannually on June $30$ and December $31.$ The bonds were issued for an effective interest rate of $10\%.$

Required:

a$.$ Prepare an amortization table for the first $3$ payment periods using the effective interest method in the following format $($rounded to the nearest two decimal place$)$:

$(4$ marks$)$

$\backslash$table$[[\backslash$table$[[$Semi$-$annual$],[$Interest$],[$Period$-$end$],[$Date$]],\backslash$table$[[($A$)],[$Cash$],[$Interest$],[$Paid$]],\backslash$table$[[($B$)],[$Bond$],[$Interest$],[$Expense$]],\backslash$table$[[($C$)],[$Discount$],[$Amortization$]],\backslash$table$[[($D$)],[$Unamortized$],[$Discount$]],\backslash$table$[[($E$)],[$Carrying$],[$Amount$]]]]$

b$.$ Prepare the journal entry $($without explanation$)$ to record the issuance of the bonds on January $1,2022.$

$(3$ marks$)$

c$.$ Prepare the journal entry $($without explanation$)$ to record the third interest payment on June $30,2023.$

$(3$ marks$)$

d$.$ Describe four characteristics of the effective$-$interest method of accounting for bonds.

$(4$ marks$)$