13. Harriman Company authorized a $1,000,000, 5-year, 6% bond issue dated January 1, 2019, when the market rate was 8%. Annual interest will be paid each December 31. On January 1, 2019, the bonds were issued for $920,162. Harriman Company has a December 31 year-end.

1. Prepare the journal entry to record the sale of the bonds.

Account	Debit	Credit
Cash
Discount on Bonds Payable
Bonds Payable

2. Was the bond issued at par, at a discount, or at a premium? And will interest expense over the life of the bond be greater than, less than, or equal to the total cash interest payment over the life of the bond?

3. Complete the bond discount/premium amortization schedule.

	(a)	(b)	(c)	(d)
Date	Cash Payment for Interest	Interest Expense	Amortization of Bond Discount/Premium	Bonds Payable Total Book Value
1/1/2019	NA	NA	NA
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
Total				NA

4. Prepare the required journal entry on December 31, 2019 to record amortization using the effective interest method.

Account	Debit	Credit