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Preparing an amortization schedule-debt issuance

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Question - Recording Bond Entries and Preparing an Amortization Schedule-Debt Issuance Costs -Mitchell Inc. issued 60, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest semi-annually each July 1, and December 31, and were issued to yield 7%. Debt issuance costs were $1,200. The bonds mature December 31, 2022, and the company uses the effective interest method to amortize bond discounts and debt issuance costs.

a. Determine the selling price of the bonds, net of debt issuance costs. Round to the nearest dollar.

b. Prepare an amortization schedule for the full bond term.

c. Prepare journal entries on the following dates.

1. January 1, 2020, bond issuance.

2. July 1, 2020, interest payment.

3. December 31, 2020, interest payment.

Reference no: EM133037474

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