$50$ points and $6$ Extra credit points: ESTIMATED TIME $20$ minutes

Calculate the issue price of a bond $($ROUND ANSWERS TO TWO DECIMAL POINTS$)$

On January $1,2020$ Hoerner Co$.$ issued five$-$year bonds with a face value of $$500,000$ and a stated coupon interest rate of $12\%$ payable on July $1$ and January $1.$ The bonds were sold to yield a market rate of $10\%.$ Present value table factors are:

Present value of $1$ for $5$ periods at $10\%$

$\mathrm{.}62092$

Present value of $1$ for $5$ periods at $12\%$

$\mathrm{.}56743$

Future value of $1$ for $5$ periods at $10\%$

$1\mathrm{.}61051$

Future value of $1$ for $5$ periods at $12\%$

$1\mathrm{.}76234$

Present value of $1$ for $10$ periods at $5\%$

$\mathrm{.}61391$

Present value of $1$ for $10$ periods at $6\%$

$\mathrm{.}55839$

Future value of $1$ for $10$ periods at $5\%$

$1\mathrm{.}62889$

Future value of $1$ for $10$ periods at $6\%$

$1\mathrm{.}79085$

Present value of an ordinary annuity of $1$ for $5$ periods at $10\%$

$3\mathrm{.}79079$

Present value of an ordinary annuity of $1$ for $5$ periods at $12\%$

$3\mathrm{.}60478$

Future value of an ordinary annuity of $1$ for $5$ periods at $10\%$

$6\mathrm{.}10510$

Future value of an ordinary annuity of $1$ for $5$ periods at $12\%$

$6\mathrm{.}35285$

Present value of an ordinary annuity of $1$ for $10$ periods at $5\%$

$7\mathrm{.}72173$

Present value of an ordinary annuity of $1$ for $10$ periods at $6\%$

$7\mathrm{.}36009$

Future value of an ordinary annuity of $1$ for $10$ periods at $5\%$

$12\mathrm{.}57789$

Future value of an ordinary annuity of $1$ for $10$ periods at $6\%$

$13\mathrm{.}18079$

On January $1,2020$ Hoerner Co$.$ issued five$-$year bonds with a face value of $$500,000$ and a stated coupon interest rate of $12\%$ payable on July $1$ and January $1.$ The bonds were sold to yield a market rate of $10\%.$ Present value table factors are:

Present value of $1$ for $5$ periods at $10\%$

$\mathrm{.}62092$

Present value of $1$ for $5$ periods at $12\%$

$\mathrm{.}56743$

Future value of $1$ for $5$ periods at $10\%$

$1\mathrm{.}61051$

Future value of $1$ for $5$ periods at $12\%$

$1\mathrm{.}76234$

Present value of $1$ for $10$ periods at $5\%$

$\mathrm{.}61391$

Present value of $1$ for $10$ periods at $6\%$

$\mathrm{.}55839$

Future value of $1$ for $10$ periods at $5\%$

$1\mathrm{.}62889$

Future value of $1$ for $10$ periods at $6\%$

$1\mathrm{.}79085$

Present value of an ordinary annuity of $1$ for $5$ periods at $10\%$

$3\mathrm{.}79079$

Present value of an ordinary annuity of $1$ for $5$ periods at $12\%$

$3\mathrm{.}60478$

Future value of an ordinary annuity of $1$ for $5$ periods at $10\%$

$6\mathrm{.}10510$

Future value of an ordinary annuity of $1$ for $5$ periods at $12\%$

$6\mathrm{.}35285$

Present value of an ordinary annuity of $1$ for $10$ periods at $5\%$

$7\mathrm{.}72173$

Present value of an ordinary annuity of $1$ for $10$ periods at $6\%$

$7\mathrm{.}36009$

Future value of an ordinary annuity of $1$ for $10$ periods at $5\%$

$12\mathrm{.}57789$

Future value of an ordinary annuity of $1$ for $10$ periods at $6\%$

$13\mathrm{.}18079$

SHOW YOUR WORK to Calculate the issue price of the bonds. You will not receive credit unless you show your work using the factors from the above listing.

PREPARE the amortization table $($with column titles$)$ for the bond

PREPARE the journal entry for issuance for the bond on January $1,2020.$ And the first interest payment on July $1,2020.$

Extra Credit: Assume only Annual Financial statements are issued at Calendar year end December $31,2020$ and record any other journal entries needed for fiscal year $2020.$