The notes to the Thankful Charities financial statements reported the following data on December 31, Year 1 (end of the fiscal year):

Thankful Charities amortizes bonds by the effective-interest method and pays all interest amounts at December 31.

Requirements
1. Answer the following questions about Thankful Charities long-term liabilities:
a. What is the maturity value of the 5% bonds?
b. What is Thankful Charities€™ annual cash interest payment on the 5% bonds?
c. What is the carrying amount of the 5% bonds at December 31, Year 1?
2. Prepare an amortization table through December 31, Year 4, for the 5% bonds. The market interest rate on the bonds was 7%. Round all amounts to the nearest dollar. How much is Thankful Charities€™ interest expense on the 5% bonds for the year ended December 31, Year 4?
3. Show how Thankful Charities would report the 5% bonds and the 8% notes payable at December 31, Year4.

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Note 6. Indebtedness Bonds payable, 5% due in Year 8 Less: Discount. (431,150) $3,568,850 Notes payable, 8%, payable in $40,000 annual installments starting in Year .. 240,000