Consider a $10 million issue of 5-year, 6% debentures when the market interest rate was 10%. It was issued on January 1, 20X0.
1. Prepare a table showing the interest expense and the unamortized discount and ending liability balance for each semiannual period. Use Exhibit as an example.
2. Prepare the journal entry for recording interest for the 6-month period ended when the bond matures on December 31, 20X4.

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Nomina Discount For 6 Months Beginning Net Liability Interest Expense @ 6%** Interest @5% Ending Net Liability $10,000,000-(5) Amortized Unamortized Ended (2)-(3) Discount 12/31/X0 6/30/X1 $9,653,500 579,207 500,000 79,207 267,293t 12/31/X1 9,732,707 583,959500,000 83,959183,334 6/30/X2 9,816,666 588,997 500,000 88,997 94,337 12/31/X2 9,905,663 594,337500,000 94,337 $346,500 9,653,500 9,732,707 9,816,666 9,905,663 0 $10,000,0008 $2,346,500 $2,000,000 $346,500