Problem - January 1, 2017: Mega Corporation issued 10 year, 10% bonds with a face value of 2,575,000. The bonds were sold yield 9%. Interest is payable semi-annually on January 1 and July 1.

1. What is the issue price of the bonds? (Show calculation or financial calculator inputs.)

2. Using EXCEL, prepare an amortization table for the entire bond term. Table should be properly labeled and neatly presented. Amounts should have commas and be rounded to the nearest dollar. Print and attach the table to this paper.

HINT: For the Date Column, you can use the EDATE Function to easily add 6 months to your starting date and copy down to create labels for each row.

3. Record the bond issuance on 1/1/17.

4. Assume the company prepares financial statements semi-annually on June 30 and December 31. Prepare the appropriate adjusting entries for June 30, 2017 and December 31, 2017 for interest and for amortization of the discount or premium. Use effective method amortization.

5. What accounts related to this bond would be shown on the 12/31/17 balance sheet? Show in the proper sections.