Q1.

National Orthopedics Co. issued 9% bonds, dated January 1, with a face amount of $500,000 on January 1, 2016. The bonds mature on December 31, 2019 (4 years). For bonds of similar risk and maturity the market yield was 10%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required: 1. Determine the price of the bonds at January 1, 2016.

n = ? i = ?

Cash Flow Amount Present Value

Interest $ ? $?

Principal $? $?

--------------------

2. Prepare the journal entry to record their issuance by National on January 1, 2016

Record the issuance of the bonds on January 1, 2016.

------------------------

3. Prepare an amortization schedule that determines interest at the effective rate each period.

Semiannual Interest Period-End Cash Interest Bond Interest Expense Discount Amortization Carrying Value

01/01/2016 ?

06/30/2016 ? ? ? ?

12/31/2016 ? ? ? ?

06/30/2017 ? ? ? ?

12/31/2017 ? ? ? ?

06/30/2018 ? ? ? ?

12/31/2018 ? ? ? ?

06/30/2019 ? ? ? ?

12/31/2019 ? ? ? ?

Total ? ? ? ?

--------------------------------------------

4. Prepare the journal entry to record interest on June 30, 2016.

Record the interest expense on June 30, 2016.

--------------------------------------------

5. Prepare the appropriate journal entries at maturity on December 31, 2019

A. Record the interest expense on December 31, 2019.

B.

Record the interest expense on December 31, 2019.

Record the retirement of the bond at maturity on December 31, 2019.

----------------------

Q2

The Gorman Group issued $900,000 of 13% bonds on June 30, 2016, for $967,707. The bonds were dated on June 30 and mature on June 30, 2036 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually on December 31 and June 30.

Required:

Complete the below table to record the company's journal entry

December 31, 206 Amount x Interest Rate = Total

Interest expense ? ? ?

Cash ? ? ?

Amortization of premium on bonds ?

June 30, 2017

Interest expense ? ? ?

Cash ? ? ?

Amortizaton of premium on bonds $?

---------------------------------------------

1. to 3. Prepare the journal entry to record their issuance by The Gorman Group on June 30, 2016, interest on December 31, 2016 and interest on June 30, 2017 (at the effective rate)

A. Record the issuance of the bond on June 30, 2016.

B. Record the interest on December 31, 2016 (at the effective rate).

C. Record the interest on June 30, 2017 (at the effective rate).

*** Please provide step by step calcualted. I really appreciate your help!

Thanks,