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Calculate the issue price of the bond

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Reference no: EM132768710

Question - Banjo Education Corp. issued a 4%, $160,000 bond that pays interest semiannually each June 30 and December 31. The date of issuance was January 1, 2020. The bonds mature after four years. The market interest rate was 6%. Banjo Education Corp.'s year-end is December 31.

Required -

1. Calculate the issue price of the bond.

2. Make or prepare a general journal entry to record the issuance of the bonds.

3. Determine the total bond interest expense that will be recognized over the life of these bonds.

4. Prepare the first two years of an amortization table based on the effective interest method.

5. Present the journal entries Banjo would make to record the first two interest payments.

Reference no: EM132768710

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