Problem One

Frankenstein Inc issued $$1,000,000,10\%,10-$year bonds on December $31,2014,$ for $$885,300$ cash. The current market rate is $12\%.$ The corporation uses the effective interest amortization method. Interest is payable semiannually on June $30$ and December $31.$

Required:

a$)$ Journalize the issuance of the bond

b$)$ Prepare an amortization schedule for the first five payment periods

C$)$ Journalize the first two interest payments