Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2018, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,456,448.

Required

1. Prepare the January 1, 2018, journal entry to record the bonds? issuance.

2. For each semiannual period, compute (a) the cash payment, (b) the straight-line discount amortization, and (c) the bond interest expense.

3. Determine the total bond interest expense to be recognized over the bonds? life.

4. Prepare the first two years of an amortization table like Exhibit 10.7 using the straight-line method.

5. Prepare the journal entries to record the first two interest payments.

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Exhibit 10.7 Straight-Line Amortization of Bond Discount Unamortized Semlannual Carrylng Value Period-End Discount $ 96,400 (0) 12/31/2018.. $3,600 6/30/2019.. (1) 2,700 97,300 (2) 12/31/2019 1,800 98,200 900 (3) 6/30/2020.. 99,100 (4) 12/31/2020.. The columns always sum to par value for discount bonds. 100,000 * Total bond discount of $3,600 less accumulated periodic amortization of $900 per semiannual interest period. Bond par value of $100,000 kss unamortized discount.