The Macaulay Corporation issues $141,000 face value of 10 percent semi-annual bonds. The bonds are dated July 1, Year 1. The principal amount is repayable on July 1, Year 11, or ten years later. Interest payments are due on July 1 and January 1 of each year. The total issue of bonds was acquired in the market on July 1, Year 1, at a rate to yield 12 percent compounded semi-annually. Use the tables in Appendix B to prepare the effective interest method amortization schedule (use 4 decimal places in your intermediate calculations, round your answer at 2 decimal places).

QUESTION:

Required 1: What is the amount of cash received in exchange for the bonds when they were issued? $

Required 2: What is the amount of interest paid in each coupon? $

Required 3: What is the net liability at the start of period 2 (immediately after the first payment is made)? $

Required 4: What is the net liability at the end of period 3 (immediately after the third payment is made)? $

Required 5: What is the amount of interest expense recorded on July 1, year 3 (the fourth payment)? $

Required 6: What is the bond amortization of period 5? $