Duval Co. issues four-year bonds with a $100,000 par value on June 1, 2016, at a price

Question:

Duval Co. issues four-year bonds with a $100,000 on June 1, 2016, at a price of $95,948. The annual contract rate is 7%, and interest is paid semiannually on November 30 and May 31.
1. Prepare an amortization table like the one in Exhibit 10.7 for these bonds. Use the straight-line method of interest amortization.
2. Prepare journal entries to record the first two interest payments and to accrue interest as of December 31, 2016?
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...