9. On October 1, 2018 Free Industries issued 4%, 10-year bonds with a face value of $6,150,000 at 106. Interest is paid every six months on October 1 and April 1, with any premiums or discounts 3 amortized using the effective interest method. (Hint: Interest is only paid after time passes). The entry to record the issuance of the bonds would include a credit of

a. $5,781,000 to Bonds Payable

b. $369,000 to Discount on Bonds Payable

c. $369,000 to Premium on Bonds Payable

d. $123,000 to Interest Payable

10. On January 1, 2018, Ann Demas loaned $212,355 to Joe Smith. A zero-interest-bearing note (face amount, $275,000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2020. The prevailing rate of interest for a loan of this type is 9%. The present value of $275,000 at 9% for three years is $212,355. What amount of interest expense should Joe Smith recognize in 2019?