On 6/1/05 Tocinto sold its 8 year $1000 face value 9% b

On 6/1/05 Tocinto sold its 8 year $1000 face value 9% bonds dated 6/1/05 at an effective annual interest rate of (yield) 10%. Interest is payable semiannually with the first payment due 9/1/05. Tocinto uses the effective interest method of amortization. Bonds issue costs were incurred. The bonds can be called at 101 after 6/1/06. (A) EXPLAIN HOW SELLING PRICE IS DETERMINED
(B) describe how all items related to the bonds would be presented in a balance sheet prepared immediately after the bond issue was sold
(C) would the amount of bond discount amortization using the effective interest method be lower in the second or thrid year of the life of the bond issue? Why?
(D) assuming that the bonds were called in and retired on 3/1/06 describe how Tocinto reports the retirement of the bond on the 2006 income statement. On 6/1/05 Tocinto sold its 8 year $1000 face value 9% bonds dated 6/1/05 at an effective annual interest rate of (yield) 10%. Interest is payable semiannually with the first payment due 9/1/05. Tocinto uses the effective interest method of amortization. Bonds issue costs were incurred. The bonds can be called at 101 after 6/1/06. (A) EXPLAIN HOW SELLING PRICE IS DETERMINED
(B) describe how all items related to the bonds would be presented in a balance sheet prepared immediately after the bond issue was sold
(C) would the amount of bond discount amortization using the effective interest method be lower in the second or thrid year of the life of the bond issue? Why?
(D) assuming that the bonds were called in and retired on 3/1/06 describe how Tocinto reports the retirement of the bond on the 2006 income statement.
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