On December 31, 2016, when the market interest rate is 16%, Bryant Realty issues $700,000 of 17.25%, 10-year bonds payable. The bonds pay interest semiannually. Bryant Realty received $743,262 in cash at issuance.
Requirements
1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods.
2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments.
Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise.