Jackson Corporation issued $600,000 of 6%, 10-year bonds payable on January 1, 2016. The market interest rate at the date of issuance was 4%, and the Jackson Corporation bonds pay interest semiannually. Jackson Corporation's year-end is June 30.
1. Using the PV function in Excel, calculate the issue price of the bonds.
2. Prepare an effective-interest amortization table for the bonds through the first three interest payments. Round amounts to the nearest dollar.
3. Record Jackson Corporation's issuance of the bonds on January 1, 2016, and payment of the first semiannual interest amount and amortization of the bond premium on June 30, 2016. (The bonds pay interest each June 30 and December 31.) Explanations are not required.