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On June 1,2013, Everly Bottle Company sold $2,000,000 in long-term bonds for $1,754,200. The bonds...

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Accounting

On June 1,2013, Everly Bottle Company sold $2,000,000 in long-term bonds for $1,754,200. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. (Hint): Review chapter 9, page 299 and subsequent pages in your textbook)
Instructions
A. Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization each May 31. Include only the first four years. Make sure all columns and rows are properly labeled. (Round to the nearest dollar.)
B. The sales price of $1,754,200 was determined from present value tables. Specifically, explain how one would determine the price using present value tables.
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