Analyzing and Reporting Financial Statement E$$ects of Bond Transactions $($FSET$)$

On January $1,$ Hutton Corp. issued $$400,000$ of $15-$year, $11\%$ bonds payable for $$503,753,$ yielding an

e$$ective interest rate of $8\%.$ Interest is payable semiannually on June $30$ and December $31.$

a$.$

Show computations to con$$rm the issue price of $$503,753.$

b$.$

Record the bond issuance, semiannual interest payment, and premium amortization on June

$30,$ and semiannual interest payment and premium amortization on December $31$ in the $$nan$-$

cial statement e$$ects template. Use the e$$ective interest rate method.