Celtic Design, a public textile company issued a public bond on January 1st, 2021. The proceeds of the bond were used for new digital looming and weaving machines The bond face value for the ten year bond was $2,000,000, with a bond rate of interest of 6%. Interest is payable semiannually on January 1 and July 1. The bond sold at 96, when the market rate of interest was 7%. Any discount or premium is amortized using the effective-interest method.

Required:

Prepare journal entries on:

January 1, 2021

July 1, 2021

December 31, 2021, the fiscal year end

What is the carrying value of the bond at year end?