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# Issue Price of Bonds, Amortization Schedule of Bonds

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On January 1, 2008, Langly Co. issued ten-year bonds ith a face value of \$1,000,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table value are:

Present value of 1 for 10 periods at 10%...................0.386
Present value of 1 for 10 periods at 12%...................0.322
Present value of 1 for 20 periods at 5%...................0.377
Present value of 1 for 20 periods at 10%...................0.312
Present value of annuity for 10 periods at 10%.............6.145
Present value of annuity for 10 periods at 12%.............5.650
Present value of annuity for 20 periods at 5%............12.462
Present value of annuity for 20 periods at 6%............11.470

a. Calculate the issue price of the bonds.

b. Without prejudice to your solution in part (a), assume that the issue price was \$ 884,000. Prepare the amortization table for 2008, assuming that amortization is recorded on interest payment dates.

Date Cash Expense Amortization Carryin Amount
1/1/08
6/30/08
12/31/08