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In: AccountingWhen Patey Pontoons issued 4% bonds on January 1, 2018, with aface amount of $500,000,...When Patey Pontoons issued 4% bonds on January 1, 2018, with aface amount of $500,000, the market yield for bonds of similar riskand maturity was 5%. The bonds mature December 31, 2021 (4 years).Interest is paid semiannually on June 30 and December 31. (FV of$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Useappropriate factor(s) from the tables provided.) Required: 1.Determine the price of the bonds at January 1, 2018. 2. Prepare thejournal entry to record their issuance by Patey on January 1, 2018.3. Prepare an amortization schedule that determines interest at theeffective rate each period. 4. Prepare the journal entry to recordinterest on June 30, 2018. 5. What is the amount related to thebonds that Patey will report in its balance sheet at December 31,2018? 6. What is the amount related to the bonds that Patey willreport in its income statement for the year ended December 31,2018? (Ignore income taxes.) 7. Prepare the appropriate journalentries at maturity on December 31, 2021.
