On July 1, 2024, Waubonsee Ltd. issued $3.2 million of 10-year, 6% bonds at $3,449,427. This price resulted in a market interest rate of 5%. The bonds pay semi-annual interest on July 1 and January 1, and Waubonsee has a December 31 year end. 

Instructions 

a. Record the issue of the bonds on July 1, 2024. 

b. Prepare an effective-interest amortization table for the first five interest payments for these bonds. Round amounts to the nearest dollar. 

c. Record the accrual of interest at December 31, 2024, and the payment on January 1, 2025. 

d. Assuming Waubonsee Ltd. has an October 31 year end, prepare the adjusting entry related to these bonds on October 31, 2024, as well as the subsequent interest payment on January 1, 2025. 

e. Assume that on January 1, 2025, after payment of the interest, Waubonsee Ltd. redeems all of the bonds at 102. Record the redemption of the bonds.

Assuming that the bonds were issued at a market interest rate of 8%, calculate the issue price of the bonds.