PowerTap Utilities is planning to issue bonds with a face value of $1,800,000 and a coupon rate of 7 percent. The bonds mature in 15 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. PowerTap uses the effective-interest amortization method. Assume an annual market rate of interest of 8 percent.

1. What was the issue price on January 1 of this year?

2. What is the book value of the bonds on June 30 and December 31 of this year?

Bonds Payable June 30:

Bonds Payable December 31: