Please solve only Question Number 2 ONLY. Please do all the columns when showing the work!

On 1 January 2005, Franco Ltd. purchased $510,000 of Gentron Company 7.00% bonds. The bonds pay semi-annual interest each 30 June and 31 December. The market interest rate was 8% on the date of purchase. The bonds mature on 31 December 2010. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Calculate the price paid by Franco Ltd. (Round time value factor to 5 decimal places. Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) Price paid $ 510,000 2. Assume that the bond is classified as an AC investment. Construct a table that shows interest revenue reported by Franco, and the carrying value of the investment, for four interest periods. Use the effective-interest method. (Round your answers to the nearest whole dollar amount.) Period Cash Payment Interest Revenue Amortization 0 1 $ Bond Carrying Value $ 0 17,163 16,503 15,869 15,258 17,850 17,850 17,850 17,850 2 4 TABLE 1-1: Present value of 1: (P/F, i, n) P/F 1 (1 + i)" 3% 4% 6% 7% 1 2 3 2% 0.98039 0.96117 0.94232 0.92385 0.90573 2.5% 0.97561 0.95181 0.92860 0.90595 0.88385 0.97087 0.94260 0.91514 0.88849 0.86261 0.96154 0.92456 0.88900 0.85480 0.82193 5% 0.95238 0.90703 0.86384 0.82270 0.78353 0.94340 0.89000 0.83962 0.79209 0.74726 0.93458 0.87344 0.81630 0.76290 0.71 299 8% 0.92593 0.85734 0.79383 0.73503 0.68058 9% 0.91743 0.84168 0.77218 0.70843 0.64993 10% 0.90909 0.82645 0.75131 0.68301 0.62092 11% 0.90090 0.81 162 0.73119 0.65873 0.59345 12% 0.89286 0.79719 0.71178 0.63552 0.56743 14% 0.87719 0.76947 0.67497 0.59208 0.51937 15% 0.86957 0.75614 0.65752 0.57175 0.49718 6 7 0.88797 0.87056 0.85349 0.83676 0.82035 0.86230 0.84127 0.82075 0.80073 0.78120 0.83748 0.81309 0.78941 0.76642 0.74409 0.79031 0.75992 0.73069 0.70259 0.67556 0.74622 0.71068 0.67684 0.64461 0.61391 0.70496 0.66506 0.62741 0.59190 0.55839 0.66634 0.62275 0.58 201 0.54393 0.50835 0.63017 0.58 349 0.54027 0.50025 0.46319 0.59627 0.54703 0.50187 0.46043 0.42241 0.56447 0.51316 0.46651 0.424 10 0.38554 0.53464 0.48166 0.43393 0.39092 0.35218 0.50663 0.45235 0.40388 0.36061 0.32197 0.45559 0.39964 0.35056 0.30751 0.26974 0.43233 0.37594 0.32690 0.28426 0.247 18 9 10 11 12 13 14 15 0.80426 0.78849 0.77303 0.75788 0.74301 0.762 14 0.74356 0.72542 0.70773 0.69047 0.72242 0.70138 0.68095 0.66112 0.64186 0.64958 0.62460 0.60057 0.57748 0.55526 0.58468 0.55684 0.53032 0.50507 0.48102 0.52679 0.49697 0.46884 0.44230 0.41727 0.47509 0.44401 0.41496 0.38782 0.36245 0.42888 0.39711 0.36770 0.34046 0.31524 0.38753 0.35553 0.32618 0.29925 0.27454 0.35049 0.31863 0.28966 0.26333 0.23939 0.31 728 0.28584 0.25751 0.23199 0.20900 0.28748 0.25668 0.22917 0.20462 0.18270 0.23662 0.20756 0.18207 0.15971 0.14010 0.21494 0.18691 0.16253 0.14133 0.12289 16 17 18 19 20 0.72845 0.71416 0.70016 0.68643 0.67297 0.67362 0.65720 0.64117 0.62553 0.61027 0.62317 0.60502 0.58739 0.57029 0.55368 0.53391 0.51337 0.49363 0.47464 0.45639 0.45811 0.43630 0.41552 0.39573 0.37689 0.39365 0.37136 0.35034 0.33051 0.31 180 0.29189 0.27027 0.25025 0.23171 0.21455 0.25187 0.23107 0.21199 0.19449 0.17843 0.21763 0.19784 0.17986 0.16351 0.14864 0.18829 0.16963 0.15282 0.13768 0.12403 0.16312 0.14564 0.13004 0.11611 0.10367 0.12289 0.10780 0.09456 0.08295 0.07276 0.10686 0.09293 0.08081 0.07027 0.06110 21 22 23 24 25 0.65978 0.64684 0.63416 0.62172 0.60953 0.59539 0.58086 0.56670 0.55288 0.53939 0.53755 0.52189 0.50669 0.49193 0.47761 0.43883 0.42196 0.40573 0.39012 0.37512 0.35894 0.34185 0.32557 0.31007 0.29530 0.29416 0.27751 0.26180 0.24698 0.23300 0.33873 0.31657 0.29586 0.27651 0.25842 0.24151 0.22571 0.21095 0.19715 0.18425 0.17220 0.16093 0.15040 0.14056 0.13137 0.19866 0.18394 0.17032 0.15770 0.14602 0.16370 0.15018 0.13778 0.1 2640 0.11597 0.13513 0.12285 0.11168 0.10153 0.09230 0.09256 0.08264 0.07379 0.06588 0.05882 0.06383 0.05599 0.04911 0.04308 0.03779 0.05313 0.04620 0.04017 0.03493 0.03038 0.11174 0.10067 0.09069 0.08170 0.07361 0.06631 0.05974 0.05382 0.04849 0.04368 26 27 28 29 30 0.59758 0.58586 0.57437 0.56311 55207 0.52623 0.51340 0.50088 0.48866 0.47674 0.46369 0.45019 0.43708 0.42435 0.41199 0.36069 0.34682 0.33348 0.32065 0.30832 0.281 24 0.26785 0.25509 0.24295 0.23138 0.21981 0.20 737 0.19563 0.18456 0.17411 0.13520 0.12519 0.11591 0.10733 0.09938 0.10639 0.09761 0.08955 0.08215 0.07537 0.08391 0.07628 0.06934 0.06304 0.05731 0.05252 0.04689 0.04187 0.03738 0.03338 0.03315 0.02908 0.02551 0.02237 0.01963 0.02642 0.02297 0.01997 0.01737 0.01510 31 32 33 34 35 0.54125 0.53063 0.52023 0.51003 0.50003 0.46511 0.45377 0.44270 0.43191 0.42137 0.39999 0.38834 0.37703 0.36604 0.35538 0.29646 0.28506 0.27409 0.26355 0.25342 0.22036 0.20987 0.19987 0.19035 0.18129 0.16425 0.15496 0.14619 0.13791 0.13011 0.12277 0.11474 0.10723 0.10022 0.09366 0.09202 0.08520 0.07889 0.07305 0.06763 0.06915 0.06344 0.05820 0.05339 0.04899 0.05210 0.04736 0.04306 0.03914 0.03558 0.03935 0.03545 0.03194 0.02878 0.02592 0.02980 0.02661 0.02376 0.02121 0.01894 0.01722 0.01510 0.01325 0.01162 0.01019 0.01313 0.01142 0.00993 0.00864 0.00751 36 37 38 39 40 0.49022 0.48061 0.47119 0.46195 0.45289 0.41109 0.40107 0.391 28 0.38174 0.37243 0.34503 0.33498 0.32523 0.31575 0.30656 0.24367 0.23430 0.22529 0.21662 0.20829 0.17266 0.16444 0.15661 0.14915 0.14205 0.12274 0.11579 0.10924 0.10306 0.09722 0.08 754 0.08 181 0.07646 0.07146 0.06678 0.06262 0.05799 0.05369 0.04971 0.04603 0.04494 0.04123 0.03783 0.03470 0.03184 0.03235 0.02941 0.02673 0.02430 0.02209 0.02335 0.02104 0.01896 0.01708 0.01538 0.01691 0.01510 0.01348 0.01204 0.01075 0.00894 0.00784 0.00688 0.00604 0.00529 0.00653 0.00568 0.00494 0.00429 0.00373 45 0.41020 0.32917 0.26444 0.17120 0.11130 0.07265 0.04 761 0.03 133 0.02069 0.01372 0.00913 0.00610 0.00275 0.00186 50 0.37153 0.29094 0.22811 0.14071 0.08720 0.05429 0.03395 0.02132 0.01345 0.00852 0.00542 0.00346 0.00143 0.00092 TABLE 1-2: Present value of an ordinary an nuity of n payments of 1:(P/A,i,n) 1 1 P/A = (1 + i)" i 2% 9% 1 - NM 2.5% 0.97561 1.92742 2.85602 3.76197 4.64583 3% 0.97087 1.91347 2.82861 3.71710 4.57971 5.41719 6.23028 7.01969 7.78611 8.53020 5% 0.95238 1.85941 2.72325 3.54595 4.32948 4% 0.96154 1.88609 2.77509 3.62990 4.45182 5.24214 6.00205 6.73274 7.43533 8.11090 6% 0.94340 1.83339 2.67301 3.46511 4.21236 4 5 7% 0.93458 1.80802 2.62432 3.38721 4.10020 0.98039 1.94156 2.88388 3.80773 4.71346 5.60143 6.47199 7.32548 8.16224 8.98259 8% 0.92593 1.78326 2.57710 3.31213 3.99271 4.62 288 5. 20637 5.74664 6.24689 6.71008 10% 11% 12% 14% 15% 0.91 743 0.90909 0.90090 0.89286 0.87719 0.86957 1.75911 1.73554 1.71 252 1.69005 1.64666 1.62571 2.53129 2.48685 2.44371 2.40183 2.32163 2.28323 3.23972 3.16987 3.10245 3.03735 2.91371 2.85498 3.88965 3.79079 3.69590 3.60478 3.43308 3.35216 4.48592 4.35526 4.23054 4.11141 3.88867 3.78448 5.03295 4.86842 4.71 220 4.56376 4.28830 4.16042 5.53482 5.33493 5.14612 4.96764 4.63886 4.48732 5.99525 5.75902 5.53705 5.32825 4.94637 4.77158 6.41766 6.14457 5.88923 5.65022 5.21612 5.01877 6 7 8 9 10 5.50813 6.34939 7.17014 7.97087 8.75206 5.07569 5.78637 6.46321 7.10782 7.72173 4.91732 5.58238 6.20979 6.80169 7.36009 4.76654 5.38929 5.97130 6.51523 7.02358 11 12 13 9.78685 9.51421 9.25262 8.76048 8.30641 10.57534 10.25776 9.95400 9.38507 8.86325 11.34837 10.98318 10.63496 9.98565 9.39357 12.10625 11.69091 11.29607 10.56312 9.89864 12.84926 12.38138 11.93794 11.11839 10.37966 7.88687 8.38384 8.85268 9.29498 9.71225 7.49867 7.94269 8.35765 8.74547 9.10791 7.13896 7.53608 7.90378 8.24424 8.55948 6.80519 7.16073 7.48690 7.78615 8.06069 6.49506 6. 20652 6.81369 6.49236 7.10336 6.74987 7.36669 6.98187 7.60608 7.19087 5.93770 6.19437 6.42355 6.62817 6.81086 5.45273 5.66029 5.84236 6.00207 6.14217 5.23371 5.42062 5.58315 5.72448 5.84737 14 15 16 17 18 13.57771 13.05500 12.56110 11.65230 10.83777 10.10590 9.44665 14.29187 13.71220 13.16612 12.16567 11.27407 10.47726 9.76322 14.99203 14.35336 13.75351 12.65930 11.68959 10.82760 10.05909 15.67846 14.97889 14.32380 13.13394 12.08532 11.15812 10.33560 16.35143 15.58916 14.87747 13.59033 12.46221 11.46992 10.59401 8.85137 9.12164 9.37189 9.60360 9.81815 8.31 256 7.82371 7.37916 8.54363 8.02155 7.54879 8.75563 8. 20141 7.70162 8.95011 8.36492 7.83929 9.12855 8.51356 7.96333 6.97399 6.26506 5.95423 7.11963 6.37286 6.04716 7.24967 6.46742 6.12797 7.36578 6.55037 6.19823 7.46944 6.62313 6.25933 19 20 21 22 23 24 25 6.68696 6.74294 6.79206 6.83514 6.87293 6.31246 6.35866 6.39884 6.43377 6.46415 7.56200 7.64465 7.71843 7.78432 7.84314 7.89566 7.94255 7.98442 8.02181 8.05518 26 27 28 29 30 6.90608 6.93515 6.96066 6.98304 7.00266 6.49056 6.51353 6.53351 6.55088 6.56598 17.01121 16.18455 15.41502 14.02916 12.82115 11.76408 10.83553 10.01680 9.29224 8.64869 8.07507 17.65805 16.76541 15.93692 14.45112 13.16300 12.04158 11.06124 10.20074 9.44243 8.77154 8.17574 18.29220 17.33211 16.44361 14.85684 13.48857 12.30338 11.27219 10.37106 9.58021 8.88322 8.26643 18.91393 17.88499 16.93554 15.24696 13.79864 12.55036 11.46933 10.52876 9.70661 8.98474 8.34814 19.52346 18.42438 17.41315 15.62 208 14.09394 12.78336 11.65358 10.67478 9.82258 9.07704 8.42174 20.12104 18.95061 17.87684 15.98277 14.37519 13.00317 11.82578 10.80998 9.92897 9.16095 8.48806 20.70690 19.46401 18.32703 16.32959 14.64303 13.21053 11.98671 10.93516 10.02658 9.23722 8.54780 21.28127 19.96489 18.76411 16.66306 14.89813 13.40616 12.13711 11.05108 10.11613 9.30657 8.60162 21.84438 20.45355 19.18845 16.98371 15.14107 13.59072 12.27767 11.15841 10.19828 9.36961 8.65011 22.39646 20.93029 19.60044 17.29203 15.37245 13.76483 12.40904 11.25778 10.27365 9.42691 8.69379 22.93770 21.39541 20.00043 17.58849 15.59281 13.92909 12.53181 11.34980 10.34280 9.47901 8.73315 23.46833 21.84918 20.38877 17.87355 15.80268 14.08404 12.64656 11.43500 10.40624 9.52638 8.76860 23.98856 22.29188 20.76579 18.14765 16.00255 14.23023 12.75379 11.51389 10.46444 9.56943 8.80054 24.49859 22.72379 21.13184 18.41120 16.19290 14.36814 12.85401 11.58693 10.51784 9.60857 8.82932 24.99862 23.14516 21.48722 18.66461 16.37419 14.49825 12.94767 11.65457 10.56682 9.64416 8.85524 25.48884 23.55625 21.832 25 18.90828 16.54685 14.62099 13.03521 11.71719 10.61176 9.67651 8.87859 25.96945 23.95732 22.167 24 19.14258 16.71 129 14.736 78 13.11702 11.77518 10.65299 9.70592 8.89963 26.44064 24.34860 22.49246 19.36786 16.86 789 14.84602 13.19347 11.82887 10.69082 9.73265 8.91859 26.90259 24.73034 22.80822 19.58448 17.01 704 14.94907 13.26493 11.87858 10.72552 9.75696 8.93567 27.35548 25.10278 23.1 1477 19.79277 17.15909 15.04630 13.33171 11.92461 10.75736 9.77905 8.95105 31 32 33 34 35 8.08499 8.11159 8.13535 8. 15656 8. 17550 7.01988 7.03498 7.04823 7.05985 7.07005 6.57911 6.59053 6.60046 6.60910 6.61661 36 37 38 39 40 8. 19241 8. 20751 8. 22099 8.23303 8. 24378 7.07899 7.08 683 7.09371 7.09975 7. 10504 6.62314 6.62881 6.63375 6.63805 6.64178 45 7.12322 6.65429 29.49016 26.83302 24.51871 20.72004 17.77407 15.45583 13.60552 12. 10840 10.88120 9.86281 31.42361 28.36231 25.72976 21.48218 18.25593 15.76186 13.80075 12.23348 10.96168 9.91481 9.00791 8.28252 9.04 165 8.30450 50 7.13266 6.66051 TABLE 1-3: Present value of an annuity due of n payments of 1: (P/AD, i, n) 1 (1 + i)" P/AD = x (1 + i) 5% n 1 2 3 4 2% 1.00000 1.98039 2.94156 3.88388 4.80773 2.5% 1.00000 1.97561 2.92742 3.85602 4.76197 3% 1.00000 1.97087 2.91347 3.82861 4.71710 4% 1.00000 1.96154 2.88609 3.77509 4.62990 1.00000 1.95238 2.85941 3.72325 4.54595 6% 1.00000 1.94340 2.83339 3.67301 4.46511 7% 1.00000 1.93458 2.80802 3.62432 4.38721 8% 1.00000 1.92593 2.78326 3.57710 4.31213 9% 1.00000 1.91743 2.75911 3.531 29 4.23972 5 10% 11% 12% 14% 15% 1.00000 1.00000 1.00000 1.00000 1.00000 1.90909 1.90090 1.89286 1.87719 1.86957 2.73554 2.71252 2.69005 2.64666 2.62571 3.48685 3.44371 3.40183 3.32163 3.28323 4.16987 4.10245 4.03735 3.91371 3.85498 4.79079 4.69590 4.60478 4.43308 4.35216 5.35526 5.23054 5.11141 4.88867 4.78448 5.86842 5.71220 5.56376 5.28830 5.16042 6.33493 6.14612 5.96764 5.63886 5.48732 6.75902 6.53705 6.32825 5.94637 5.77158 6 7 8 9 5.71346 6.60143 7.47199 8.32548 9.16224 5.64583 6.50813 7.34939 8.17014 8.97087 5.57971 6.41719 7.23028 8.01969 8.78611 5.45182 6.24214 7.00205 7.73274 8.43533 5.32948 6.07569 6.78637 7.46321 8.10782 5.21236 5.91 732 6.58238 7. 20979 7.80169 5.10020 5.76654 6.38929 6.97130 7.51523 4.99271 5.62288 6.20637 6.74664 7.24689 4.88965 5.48592 6.03295 6.53482 6.99525 10 11 12 13 15 16 17 18 19 20 9.98259 9.75206 9.53020 9.11090 8.72173 8.36009 8.02358 7.71008 7.41766 7.14457 6.88923 6.65022 6.21612 6.01877 10.78685 10.51421 10.25262 9.76048 9.30641 8.88687 8.49867 8.13896 7.80519 7.49506 7.20652 6.93770 6.45273 6.23371 11.57534 11.25776 10.95400 10.38507 9.86325 9.38384 8.94269 8.53608 8.16073 7.81369 7.49236 7.19437 6.66029 6.42062 12.34837 11.98318 11.63496 10.98565 10.39357 9.85268 9.35765 8.90378 8.48690 8. 10336 7.74987 7.42355 6.84236 6.58315 13.10625 12.69091 12.29607 11.56312 10.89864 10.29498 9.74547 9.24424 8.78615 8.36669 7.98187 7.62817 7.00207 6.72448 13.84926 13.38 138 12.93794 12.11839 11.37966 10.71225 10.10791 9.55948 9.06069 8.60608 8.19087 7.81086 7.14217 6.84737 14.57771 14.05500 13.56110 12.65230 11.83777 11.10590 10.44665 9.85137 9.31256 8.82371 8.37916 7.97399 7.26506 6.95423 15. 29187 14.71220 14.16612 13.16567 12.27407 11.47726 10.76322 10.12164 9.54363 9.02155 8.54879 8.11963 7.37286 7.04716 15.99203 15.35336 14.75351 13.65930 12.68959 11.82760 11.05909 10.37189 9.75563 9.20141 8.70162 8.24967 7.46742 7.12797 16.67846 15.97889 15.32380 14.13394 13.08532 12.15812 11.33560 10.60360 9.95011 9.36492 8.83929 8.365 78 7.55037 7.19823 17.35143 16.58916 15.87747 14.59033 13.46221 12.46992 11.59401 10.81815 10.12855 9.51356 8.96333 8.46944 7.62313 7.25933 18.01121 17.18455 16.41502 15.02916 13.82115 12.76408 11.83553 11.01680 10.29224 9.64869 9.07507 8.56200 7.68696 7.31246 18.65805 17.76541 16.93692 15.45112 14.16300 13.04158 12.06124 11.20074 10.44243 9.77154 9.17574 8.64465 7.74294 7.35866 19.29220 18.33211 17.44361 15.85684 14.48857 13.30338 12.27219 11.37106 10.58021 9.88322 9.26643 8.71843 7.79206 7.39884 19.91393 18.88499 17.93554 16.24696 14.79864 13.55036 12.46933 11.52876 10.70661 9.98474 9.34814 8.78432 7.83514 7.43377 20.52346 19.42438 18.41315 16.62208 15.09394 13.78336 12.65358 11.67478 10.82258 10.07704 9.42174 8.84314 7.87293 7.46415 21.12104 19.95061 18.87684 16.98277 15.37519 14.00317 12.82578 11.80998 10.92897 10.16095 9.48806 8.89566 7.90608 7.49056 21.70690 20.46401 19.32703 17.32959 15.64303 14.21053 12.98671 11.93516 11.02658 10.23722 9.54780 8.94255 7.93515 7.51353 22.28 127 20.96489 19.76411 17.66306 15.89813 14.40616 13.13711 12.05108 11.11613 10.30657 9.60162 8.98442 7.96066 7.53351 22.84438 21.45355 20.18845 17.98371 16.14107 14.59072 13.27767 12.15841 11.19828 10.36961 9.65011 9.02181 7.98304 7.55088 21 22 23 24 25 26 27 28 29 30 31 32 33 23.39646 21.93029 20.60044 18.29203 16.37 245 14.76483 13.40904 12.25778 11.27365 10.42691 9.69379 9.05518 8.00266 7.56598 23.93770 22.39541 21.00043 18.58849 16.59281 14.92909 13.53181 12.34980 11.34280 10.47901 9.73315 9.08499 8.01988 7.57911 24.46833 22.84918 21.38877 18.87355 16.80 268 15.08404 13.64656 12.43500 11.40624 10.52638 9.76860 9.11159 8.03498 7.59053 24.98856 23.29 188 21.76579 19.14765 17.00255 15.23023 13.75379 12.51389 11.46444 10.56943 9.80054 9.13535 8.04823 7.60046 25.49859 23.72379 22.13184 19.41120 17.19290 15.36814 13.85401 12.58693 11.51784 10.60857 9.82932 9.15656 8.05985 7.60910 34 35 36 37 38 39 40 25.99862 24.14516 22.48722 19.66461 17.37419 15.49825 13.94767 12.65457 11.56682 10.64416 9.85524 9.17550 8.07005 7.61661 26.48884 24.55625 22.83225 19.90828 17.54685 15.62099 14.03521 12.71719 11.61176 10.67651 9.87859 9.19241 8.07899 7.62314 26.96945 24.95732 23.16724 20.14258 17.71129 15.73678 14.11702 12.77518 11.65299 10.70592 9.89963 9.20751 8.08683 7.62881 27.44064 25.34860 23.49246 20.36786 17.86 789 15.84602 14.19347 12.82887 11.69082 10.73265 9.91859 9.22099 8.09371 7.63375 27.90259 25.73034 23.80822 20.58448 18.01704 15.94907 14.26493 12.87858 11.72552 10.75696 9.93567 9.23303 8.09975 7.63805 30.07996 27.50385 25.25427 21.54884 18.66277 16.38318 14.55791 13.07707 11.86051 10.84909 9.99878 9.27642 8.1 2047 7.65244 45 50 32.05208 29.07137 26.50166 22.34147 19.16872 16.70757 14.76680 13.21216 11.94823 10.90630 10.03624 9.30104 8.13123 7.65959