Exercise 2 Issue Bonds Payable (discount), Pay and Accrue Interest, and Amortize Bond Discount On January 31, 2016 Thomas Labs, Inc., issued five-year, 3.5% bonds payable with a face value of $6,000,000. The bonds were issued at 96 and pay interest on January 31 and July 31. Thomas Labs, Inc. amortizes bond discount by the straight-line method. 1. Record the issuance of the bonds on January 31.

2. Record the semiannual interest payment and amortization of bond discount on July 31.

3. Record the interest accrual and discount amortization on December 31.