Bonanza Graphics Inc. issued a $200,000, 8%, three-year bond on November 1, 2020, for cash of $194,792. Interest is to be paid quarterly. The annual market rate of interest is 9%. Assume a year-end of December 31. The amortization schedule, using the effective interest method, is shown below:

a. Record the issuance of the bond on November 1, 2020.

b. Record the accrual of bond interest at year-end, December 31, 2020, and the subsequent payment on February 1, 2021.

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(B) (E) (A) Cash Interest Paid $200,000 x 8% x 3/12 (D) (C) Perlod Carrying Value $200,000 – (D) Interest Discount Amort. Expense (E) x 9% x 3/12 Unamortized Period Ending (B) – (A) Discount Nov. 1/20 Feb. 1/21 $5,208 4,825 $194,792 195,175 $ 383 $ 4,383 $ 4,000 199,508 200,000 4,000 4,000 4,478 4,492 $53,208 1/23. Aug. 1/23 Nov. Totals. 478 492 $5,208 492 -0- $48,000