Problem:

On September 1, 2013, Adele Company issued 9%, $1,500,000 of bonds to partially fund construction of a new building. The bonds are structured to pay interest semi-annually and mature in 10 years. On the day of the sale, bonds of similar quality and risk were sold for the prevailing rate of 10%--Adele makes adjustments to its bond sale accordingly. In addition, Adele paid $50,000 in bond issue costs related to the bond sale. Adele Company uses the effective interest method of amortization.

Required:

Question 1: Prepare any journal entries required during the time period of September 1, 2015 through August 31, 2016. Be sure to label columns appropriately in the spreadsheet provided. Show all supporting calculations to back-up numbers presented in journal entries (like bond issue price).

Question 2: Using spreadsheet software and in good form, prepare a bond amortization table through the planned maturity of the bonds.

Question 3: Using the spreadsheet software, draw a line graph depicting the bonds' book value from inception to maturity.

Question 4: Assume market conditions change and, on October 1, 2017, Adele discovers an alternative opportunity for funding. How much money will Adele need to recall (pay-off) the bond issue from September 1, 2013?

Note: Please provide full description.