On January 1, 2016, the McMillan Corporation issued $ 100,000 par value, five- year, zero- coupon bonds.

Question:

On January 1, 2016, the McMillan issued $ 100,000 par value, five- year, zero- bonds. The market rate of interest on the date of the bond issue was 6%. The company’s fiscal year ends on December 31.
Required
a. Determine the issue price of the debt.
b. Prepare the amortization table for the bond issue, assuming that McMillan uses the effective interest rate method of amortization.
c. Prepare the journal entries to record the bond issue, the amortization entry on December 31, 2016, and payment of the bonds at maturity. Assume the company uses a premium or discount account, if needed. . Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...