Team Ltd is authorized to issue $2,000,000 of 3%. 10-year bonds payable. On December 31 2014, when the market interest rate is 5%, the company issues $1,600,000 of the bonds. Team Ltd. amortizes bond discount by the effective-interest method. The semiannual interest dates are Juno 30 and December 31.
Requirements
1. Use the PV function in Excels to calculate the issue price of the bonds
2. Prepare a bond amortization table for the first year of the bonds
3. Record issuance of bonds payable on December 31, 2014; the first semiannual interest payment on June 30, 2015; and the second payment on December 31, 2015.