On January 1, 2012, Tallakson Company issues a $50,000, 5-year, 8% bond with interest payable annually on

Question:

On January 1, 2012, Tallakson Company issues a $50,000, 5-year, 8% bond with interest payable annually on December 31. The market interest rate at issuance is 10%. Tallakson uses the effective interest method of amortization.
Required
a. Determine the issuance price of the bond by using the appropriate table(s) in Appendix A.
b. Prepare the entry for the first interest payment on December 31, 2012.
c. Prepare an amortization schedule for the bond.