Accounting Principles 2: Verbal Problem

1) On January 1, 2022 Lorenzo company sold $ 4,000,000 in 20-year bonds at 9%. Interest is payable on January 1 and July 1. The company uses the straight line system to amortize the discount or premium on the bonds. The bonds sold at 98. Assume no accrued interest as of June 30.

a) Prepare the wage entry to record the bond issue on 1/1/2022.

b) Prepare the Schedule to amortize the discount during the first two interest payment periods.

c) Prepare the wage entries for the payment of interest and amortization of the discount during 2022.