(Learning Objective 2: Issue bonds payable at a premium and amortize bonds using theeffective-interest method) Leon Corporation issued $400,000 of 10%, 10-year bonds payableon January 1, 2019. The market interest rate at the date of issuance was 8%, and the bonds payinterest semiannually (on June 30 and December 31). Leon Corporation’s year-end is June 30.1. Using the PV function in Excel, calculate the issue price of the bonds.2. Prepare an effective-interest amortization table for the bonds through the first three interestpayments. Round amounts to the nearest dollar.3. Record Leon Corporation’s issuance of the bonds on January 1, 2019, and payment of thefirst semiannual interest amount and amortization of the bond premium on June 30, 2019.Explanations are not required.
(Learning Objective 2: Issue bonds payable at a premium and amortize bonds using the
effective-interest method) Leon Corporation issued $400,000 of 10%, 10-year bonds payable
on January 1, 2019. The market interest rate at the date of issuance was 8%, and the bonds pay
interest semiannually (on June 30 and December 31). Leon Corporation’s year-end is June 30.
1. Using the PV function in Excel, calculate the issue price of the bonds.
2. Prepare an effective-interest amortization table for the bonds through the first three interest
payments. Round amounts to the nearest dollar.
3. Record Leon Corporation’s issuance of the bonds on January 1, 2019, and payment of the
first semiannual interest amount and amortization of the bond premium on June 30, 2019.
Explanations are not required.
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