Bond premium, entries for bonds payable transactions

calendar year.

Required:

For all journal entries, if an amount box does not require an entry, leave it blank.

Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July $1,20$ Y$1.$

Journalize the entries to record the following:

a$.$ The first semiannual interest payment on December $31,20$Y$1,$ and the amortization of the bond premium, using the straight$-$line method. Round to the nearest dollar.

$20Y1$ Dec. $31$

b$.$ The interest payment on June $30,20Y2,$ and the amortization of the bond premium, using the straight$-$line method. Round to the nearest dollar.

Determine the total interest expense for $20$Y$1.$ Round to the nearest dollar.

Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest?

Present value of the face amount

Present value of the semi$-$annual interest payments

Proceeds of bond issue