| District Water Company issued 10-year bonds with a face value of $100,000 and a stated interest rate of 7.0%. | |||
| The bonds are dated April 1, 2016, and call for semiannual interest payments on each April 1 and October 1. | |||
| Due to market fluctuations, the bonds actually sold to yield 10.0% per year. | |||
| INSTRUCTIONS: | |||
| 1. Compute the amount received for the bonds. | |||
| 2. Compute the first interest and amortization amounts for the October 1, 2016, payment. | |||
| 3. Prepare journal entries for the issuance of the bonds and for the first interest payment. | |||
| 4. Compute the second interest and amortization amounts for the April 1, 2017, payment. | |||