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Bond discount, entries for bonds payable transactions, interest method of amortizing bond discount

On July $1,20$Y$1,$ Livingston Corporation, a wholesaler of manufacturing equipment, issued $$46,000,000$ of $20-$year, $10\%$ bonds at a market $($effective$)$ interest rate of $11\%,$ receiving cash of $$42,309,236.$ Interest on the bonds is payable semiannually on December $31$ and June $30.$ The fiscal year of the company is the calendar year.

Required:

For all journal entries, if an amount box does not require an entry, leave it blank.

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$1.$ Journalize the entry to record the amount of cash proceeds from the issuance of the bonds.

DateAccountDebitCredit

$20$Y$1$ July $1$

Cash

$42,309,236$

Discount on Bonds Payable

$3,690,764$

Bonds Payable

$46,000,000$

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Feedback

Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account.

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$2.$ Journalize the entries to record the following:

a$.$ The first semiannual interest payment on December $31,20$Y$1,$ and the amortization of the bond discount, using the interest method. Round to the nearest dollar.

DateAccountDebitCredit

$20$Y$1$ Dec. $31$

Interest Expense

$2,327,008$

Discount on Bonds Payable

$27,008$

Cash

$2,300,000$

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Feedback

$2$a$.$ Cash received on July $1,20$Y$1$ x semiannual market rate $=$ Interest Expense $($debit$).$ Principal x semiannual contract rate $=$ cash paid $($credit$).$ The premium amortized $($debit$)$ is the difference between the two amounts.

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b$.$ The interest payment on June $30,20$Y$2,$ and the amortization of the bond discount, using the interest method. Round to the nearest dollar.

DateAccountDebitCredit

$20$Y$2$ June $30$

Interest Expense

$2,327,008$

Discount on Bonds Payable

$27,008$

Cash

$2,300,000$