Problem - Assume that ABC Co. Issues $100,000 in Bonds on January 1, 2016, due in 4 years with 8% interest payable annually at year end. At the time of issue, the market rate for such Bonds is 10%. Required:
a. Compute the present value amount.
b. Prepare the schedule of amortization using the effective interest method.
c. Prepare journal entries for the first year.