DODGE , on January 1, 2019, issued $850,000 10-year bonds with a stated (coupon) rate of interest of 8.0%. Interest is payable annually on January 1. The bonds are due January 1, 2029. At the time the bonds are sold the market (effective) rate of interest is 7.0% and the bonds sold for $910,000.

PART A:

Prepare the journal entry recorded by the Dodge for January 1, 2019 the date the bonds were sold.

PART B:

Assuming the bonds sold for $910,000 the Dodge

uses the straight line method of amortization for discounts and premiums, prepare the journal entry to record the payment of interest on January 1, 2020.

PART C:

Assuming the lands sold for $910,000 and Buffalo News uses the effective interest method of amortizing discounts and premiums and using the same market rate of interest of 7.0% annually, please prepare the entry to record the payment of interest on each of January 1, 2020 and January 1, 2021.