On 1/1/20, Ehrlich Co. issued 5-year bonds with a face value of $700,000. The stated (bond) rate is 11%, payable semiannually on 1/1 and 7/1. The market rate at the time of issuance was 12%. Show your calculations. 

a. Calculate the issue price of the bonds. 

b. Prepare the journal entry for the issuance of the bonds. 

c. Complete the amortization table below. Date cash paid interest expense amortization carrying value 1/1/20 7/1/20 1/1/21 7/1/21 1/1/22 

d. Prepare the journal entries for the 7/1/20 interest payment and amortization, 12/31/20 interest accrual and amortization, and 1/1/21 interest payment. 

e. Prepare the journal entry for the retirement of the bonds at maturity

Answer rating: 100% (QA)

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