E$10-22($Static$)$ Recording and Reporting a Bond Issued at a Premium $($Straight$-$Line Amortization with Premium Account$)$ LO$10-5$

On January $1$ of this year, Kona Corporation sold bonds with a face value of $$1,400,000$ and a coupon rate of $8$ percent. The bonds mature in four years and pay interest semiannually every June $30$ and December $31.$ Kona uses the straight$-$line amortization method and also uses a premium account. Assume an annual market rate of interest of $6$ percent. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ and PVA of $$1)$

Note: Use appropriate factor$($s$)$ from the tables provided.

Required:

$1.$ & $2.$ Prepare the journal entry to record the issuance of the bonds and the interest payment on June $30$ of this year.

$3.$ What bonds payable amount will Kona report on its June $30$ balance sheet?

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