Question $1$ Partially correct

Mark $0\mathrm{.}08$ out of $1\mathrm{.}67$

Recording Bond Entries and Preparing an Amortization Schedule$-$ Effective Interest Method, Discount, Interest Accrual

Mitchell Inc. issued $200$ of its $6\%,$$$1,000$ bonds on January $1$ of Year $1.$ The bonds pay cash interest semiannually each July $1$ and January $1$ and were issued to yield $7\%.$ The bonds mature in three years on December $31,$ and the company uses the effective interest method to amortize bond discounts or premiums.

Required

a$.$ Determine the selling price of the bonds.

b$.$ Prepare an amortization schedule for the first year of the bond term.

c$.$ Prepare journal entries on the following dates.

January $1$ of Year $1,$ bond issuance.

July $1$ of Year $1,$ interest payment.

December $31$ of Year $1,$ interest accrual.

January $1$ of Year $2,$ interest payment. $($No reversing entries made.$)$

Note Round amount to the nearest dollar.

a$.$ Selling price of bonds

$$,1,071x$

Note: Round amounts in Schedule to the nearest whole dollar.

Note: Do not use negative signs.

$\backslash$table$[[$b$.,$Cate,$\backslash$table$[[$Interest$],[$Expense$]],\backslash$table$[[$Discount$],[$Amortization$]],$Bonds Payable, Net,$],[$Jan$.1,$ Year $1,,,,$$$,0$