Prepare the effective interest amortization schedule

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Question - WIFFM Corporation issued $400,000 of 8%, five-year bonds. The bonds are dated and sold on February 1, 2017. Interest payment dates are February 1 and August 1. On the issue date, the market interest rate is 6%, resulting in the bonds being sold for $432,119. The company uses the effective-interest method of amortization.

1. Prepare the effective interest amortization schedule for the first four payments (round to the nearest dollar) for this bond.

2. Prepare journal entries for the issuance of the bond and the first interest payment.

Reference no: EM132914460

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