Reporting Financial Statement E$$ects of Bond Transactions $($FSET$)$

On January $1,$ Shields, Inc., issued $$500,000$ of $9\%,20-$year bonds for $$549,482,$ yielding a market

$($yield$)$ rate of $8\%.$ Semiannual interest is payable on June $30$ and December $31$ of each year.

a$.$

Show computations to con$$rm the bond issue price.

b$.$

Record the bond issuance, semiannual interest payment, and premium amortization on June

$30,$ and semiannual interest payment and premium amortization on December $31,$ using the

$$nancial statement e$$ects template. Use the e$$ective interest rate method.