Chapter 14 Problem Bond interest and discount amortization Grove Corporation issued $4,000,000 of 8% bonds on October 1, 2014, due on October 1, 2019. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to yield 10% effective annual interest. Grove Corporation closes its books annually on December 31 Instructions (a) Complete the following amortization schedule for the dates indicated. (Round all answers to the nearest dollar) Use the effective interest method. Debit Credit Carrying Amount Credit Cash Interest Expense Bond Discount of Bonds October 1, 2014 4,000,000 309,983 $3,691,117 April 1, 2015 160,000 160,000 October 1, 2015 160,000 160,000 (b) Prepare the adjusting entry for December 31, 2015 using the effective interest method. (c) Prepare the adjusting entry for December 31, 2015 using the straight line interest method, (d) Compute the effective interest expense to be reported in the income statement for the year ended December 31, 2015 (e) Compute the straight-line interest expense to be reported in the income statement for the year ended December 31, 2015