On January 1, 2012 Morgan's Motors issued $500,000 of 3-year, 8% bonds when the market yield was 6%. The bond agreement stated that compounding was semi-annual with payments due on June 30 and December 31.
1. Calculate the proceeds from the bond issue. (Use Excel formulas or use at least 5 decimal places in present value factors if you use the tables at the back of your book. Show calculations.)
2. Prepare an amortization table for the bonds using the effective interest method