Question: Determining the present value of bonds payable and journalizing using the effective-interest amortization method Nicholas Rausch issued $300,000 of 11%, 10-year bonds payable on January

Determining the present value of bonds payable and journalizing using the effective-interest amortization method

Nicholas Rausch issued $300,000 of 11%, 10-year bonds payable on January 1, 2014. The market interest rate at the date of issuance was 10% and the bonds pay interest semiannually.

Requirements

1. How much cash did the company received upon issuance of the bonds payable? (round all numbers to the nearest whole dollar)

2. prepare an amortization table for the bond using the effective-interest methid, through the first two interest payments. (round all numbers to nearest while dollar)

3. Journalize the issuance of the bonds on January 1, 2014, and payments of the first semiannual interest amount and amortization of the bond in June 30, 2014. Explanations are not required.

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