The notes to the Helpful Charities financial statements reported the following data on December 31, Year 1 (end of the fiscal year):

Helpful Charities amortizes bonds by the effective-interest method and pays all interest amounts at December 31.

Requirements
1. Answer the following questions about Helpful Charities long-term liabilities:
a. What is the maturity value of the 4% bonds?
b. What is Helpful Charities annual cash interest payment on the 4% bonds?
c. What is the carrying amount of the 4% bonds at December 31, Year 1?
2. Prepare an amortization table through December 31, Year 4, for the 4% bonds. The market interest rate on the bonds was 5%. Round all amounts to the nearest dollar. How much is Helpful Charities interest expense on the 4% bonds for the year ended December 31, Year 4?
3. Show how Helpful Charities would report the 4% bonds and the 7% notes payable at December 31, Year4.

Note 6. Indebtedness Bonds payable, 4% due in Year 7 onds payable, $6,000,000 due in lear / 6,000, Less: Discount (304.542) $5.695.458 Notes payable, 7%, payable in $60,000 annual installments starting in Year 360,000