CHAPTER9 LECTURE EXAMPLE5 Story Company issued $380,000, 7%, 10-year bonds on January 1, 2016, for $407,968. This price resulted in an effective interest rate of 6% on the bonds. Interest is payable annually on January 1. Story uses the effective interest method to amortize bond premiums and discounts. Prepare the journal entries to record: 1. The issuance of the bonds. 2 The accrual of interest and the premium or discount amortization on December 31, 2016. 3. The payment of interest on January 1, 2017. Also, what amounts would be shown on December 31, 2016 financial statements