Bond Issued at Discount On January 1, 2002, Albany Corporation receives $438,000 when it issues bonds with a par value of $450,000 and a stated interest rate of 7 percent. The bonds mature on December 31, 2005, and interest is paid annually on December 31. Albany Corporation uses straight-line amortization of bond discounts and premiums.

a. What amount of interest payment will Albany make on December 31, 2002?

b. What amount of interest expense will Albany record on December 31, 2002?

c. Give the balance sheet presentation of the bond liability at December 31, 2002.

d. Give the journal entries recorded by Albany Corporation during 2002 and 2003.