Prepare the journal entries that illini recorded

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On January 1, 2019, Illini issued 9%, $350,000 face value bonds for $374,059 when the effective market rate (yield) for bonds of similar risk and maturity was 7%. The bonds mature on 12/31/2022. Interest is paid semiannually on June 30 and December 31.

Problem A) Prepare an amortization schedule

Problem B) Assume that Illini elected the fair value option. Due to changes in Illini's credit risk, the yield (effective rate) was 9% on 6/30/2019. Prepare the journal entries that Illini recorded on 6/30/2019 and 12/31/2019.

Problem C) What was the total effect of the bonds on Illini pre-tax income for 2019? Please show your work.

Reference no: EM132988345

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