Question $2(30$ marks$)$

On April $30,$ Year $6,$ Tuesday Ltd$.$ issued $$1,000,000$ of $20-$year bonds paying interest twice a year on October $31$ and April $30.$ The coupon rate is $5\%,$ and the market rate was $7\%.$ The bonds were issued at $78\mathrm{.}6449.$

Required

a$.$ Calculate the issue price. Round your numbers to the nearest dollar.

b$.$ Prepare a bond amortization table for the initial issue of the bonds and the first four interest periods.

c$.$ Using the net method, prepare journal entries for the issue of the bonds and the following:

Interest payment on October $31,$ Year $6$

Interest accrual, rounded to $2$ months, on December $31,$ Year $6$

Interest payment on April $30,$ Year $7$

Interest payment on October $31,$ Year $7$

Interest accrual on December $31,$ Year $7$