Freiberg Associates issued $700,000 par value, 4-year, zero-coupon bonds on January 1, 2018. The market rare of interest on the date of the bond issue was 4%. Bond issue costs are $3,600. The company's fiscal year ends on December 31.

Required

a. Determine the issue price of the debt.

b. Find the effective interest rare after considering bond issue costs. Prepare the amortization table for the bond issue assuming that Freiberg uses the effective interest rate method of amortization.

c. Prepare the journal entries to record the bond issue and the entry o n December 31, 2018. Assume that the company uses a discount or premium account if needed.

d. Describe the income statement, balance sheet. and cash flow statement effects in 2018 of the bond issue and the amortization of discount.

e. The bonds are retired early on November 30. 2019. for $655,000. Prepare the journal entry.