Question

Champs Ltd. is authorized to issue $3,500,000 of 4?%, 10?-year bonds payable. On December? 31, 2016?,...

Champs Ltd. is authorized to issue $3,500,000 of 4?%, 10?-year bonds payable. On December? 31, 2016?, when the market interest rate is 5?%, the company issues

$2,800,000 of the bonds.

Champs Ltd. amortizes bond discount by the? effective-interest method. The semiannual interest dates are June 30 and December 31.

Requirements

1.

 Use the PV function in Excel to calculate the issue price of the bonds.

2.

Prepare a bond amortization table for the first year of the bond

3.

 Record issuance of bonds payable on December? 31, 2016 the first semiannual interest payment on June? 30, 2017 , and the second payment on December? 31,

2017.
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