QUESTION 2-2 (15 marks):

On December 31, 2021, when the market rate was 8%, East End Corp. issued $4,000,000, 10%, 5-year bonds. Interest is payable semi-annually on June 30 and December 31. The bonds were issued for $4,324,436, and the corporation uses the effective interest method of amortizing any bond premium or discount.

REQUIRED:

(a) Complete the amortization table below for the first two periods only. (USE EXCEL TEMPLATE TO COMPLETE YOUR ANSWER)

Period ending	Cash interest paid	Interest expense	Premium/ Discount Amortization	Carrying value
Dec. 31/21
June 30/22
Dec. 31/22

(b) Prepare the journal entries to record the issue of the bonds and the first

interest payment.

(c) Easy End Corp. retires its bonds on December 31, 2024 for cash of

$4,150,000. At that date the bonds have a carrying value of $4,145,196.

Prepare the journal entry to retire the bonds on December 31, 2024.