This is a test problem I need some help with. It's due by 12 o clock eastern time Dec 2, Wednesday.

The question is as follows:

On January 1, 2007, the Summit Company sold 12% bonds having a maturity value of $500,000 in a 10% market, (to yield 10%). The bonds are dated January 1, 2007 and mature on January 1, 2012, with interest payable on January 1st and July 1st over it's life. Summit allocated interest and unamortized discount or premium on the effective interest basis. Instructions: 1. Calculate the present value of this bond issue (note: market rate is 10%) 2. Prepare the journal entry at the date of bond issuance 3. Prepare a schedule of interest expense and bond amortization for the life of this bond. 4. If the summit company decides to pay off all of these bonds on July 1, 2010 with $515,000 cash, would there be a gain or loss on the redemption of these bonds? How much would this gain or loss be?