On July 1, 2011 Scotty McCrery Corporation issued $800,000 on bonds with an 8% stated interest rate. The bonds were issued to yield 10%. Interest is paid on 6/30 and 12/31 each year.The bonds are scheduled to be retired serially in 10 equal $60,000 annual payments beginning June 30, 2014 until paid off.
Required:
1. Prepare the effective interest amortizaton table for Scotty McCrery for the entire life of the bond issue.
2. Prepare the journal entries for 7/1/11, 12/31/11, 6/30/12, 6/30/14, and 6/30/15.
3. Prepare the journal entry on 3/31/16 if McCrery decides to call th $80,000 due on 6/30/18. THe call price is 98.8%.