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Prepare the amortization table

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Question - On January 1, 2021, Skysong Co. issued ten-year bonds with a face value of $4,400,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are:

Present value of 1 for 10 periods at 10% 0.386

Present value of 1 for 10 periods at 12% 0.322

Present value of 1 for 20 periods at 5% 0.377

Present value of 1 for 20 periods at 6% 0.312

Present value of annuity for 10 periods at 10% 6.145

Present value of annuity for 10 periods at 12% 5.650

Present value of annuity for 20 periods at 5% 12.462

Present value of annuity for 20 periods at 6% 11.470

Required - Calculate the issue price of the bonds.

Without prejudice to your solution in part (a), assume that the issue price was $3,889,600. Prepare the amortization table for 2021, assuming that amortization is recorded on interest payment dates using the effective-interest method.

Reference no: EM132604634

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