ZuZus Petals Corporation on January 1, 2020, issues $100,000 of 5% bonds due in 5 years with interest payable annually at year-end. The current market rate of interest for bonds of similar risk is 4%.

1.What will bond buyers pay for this bond issue? (6 points)

2.Prepare an amortization schedule for the entire life of the bond using the effective-interest rate method. (9 points)