Question
Vivid View Video, Incorporated issued$ 1,900,000 of $1,000 par value,4%,six-year bonds. Interest is payable semiannually each January 1 and July 1 with the first interest
Vivid View Video, Incorporated issued$ 1,900,000 of $1,000 par value,4%,six-year bonds. Interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the period on July 1,2016. The market rate of interest for similar non-convertible bonds on the date of the bond issue was 6 %. The bonds were sold for $2,113,847, yielding an effective rate of 2%. Each bond is convertible into 40 shares of Vivid View $5 par value common stock. Assume there is no beneficial conversion option. Prepare the amortization table for the bond issue through Jan 1, 2019 assuming that Vivid View uses the effective interest rate method of amortization. Please show work.
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