Complete the following effective-interest amortization table through October 1, 2022. Round all amounts to the nearest whole dollar.

BOND DATA

Maturity value

$2,000,000

Contract interest rate

8%

Interest paid

4% semi-annually, $80,000 ($2,000,000 x 0.04)

Market interest rate at time of issue

9% annually, 4.5% semi-annually

Issue proceeds

$1,869,921

A

B

C

D

E

F

Semi-annual Interest Period

Interest Payment (4.5% of Maturity Value)

Interest Expense (4.5% of Preceding F)

Discount Amortization

(C-B)

Unamortized Discount Account Balance (Preceding E-Current D)

Bond Carrying Amount ($2,000,000 - E)

Oct 1, 2020

Apr 1, 2021

Oct 1,2021

Apr 1, 2022

Oct 1, 2022

2. Using the amortization table you completed, record the following transactions:

a.Issuance of the bonds on October 1, 2020.

b.Accrual of interest and amortization of discount on December 31, 2020.

c.Payment of interest and amortization of discount on April 1, 2021.

d.Conversion of one-third of the bonds payable into common shares on October 2, 2022.

e.Retirement of two-thirds of the bonds payable on October 2, 2022. Purchase price of the bonds was 102.00