undefined

Problem 3 (12 points): Hamilton Corporation issued $6,000,000 of 8% bonds on January 1, 2020, due on January 1, 2025. The interest is to be paid twice a year on July 1 and January 1. The bonds were sold for $5,536,696 and yield a 10% effective annual interest rate. Hamilton Corporation closes its books annually on December 31. a) Prepare the bond amortization schedule for the Hamilton Corporation bond for the first 2 years. Interest Carrying Date Cash Interest Expense Amortization Value 1/1/2020 $5536696 7/1/2020 $240000 $276835 $36835 $5499861 1/1/2021 $240000 $274993 $34993 $5464868 7/1/2021 $240000 $273243 $33243 $5431625 1/1/2022 $240000 $271581 $31581 $5400044 b) Prepare the journal entry to record the bond issuance: Account Debit Credit Date Jan 1, 2020 Cash Discount on bonds payable Bonds Payable $5536696 $463304 $6000000 3 $276835 July 1,2020 Interest Expense Discount on Bonds Payable Bonds Payable Problem 3 continued $36835 $240000 c) Prepare the journal entry for July 1, 2020, and the adjusting entry for December 31, 2020, if any. Use the effective-interest method. Date Account Debit Credit