HealthFirst Corp. is evaluating its financial performance for the year ending December 31, 20X1. The company had the following transactions related to its liabilities:

• January 1: Issued a 10-year, 5% bond with a face value of $1,000,000 at a discount of $50,000.
• June 30: Paid semi-annual interest on the bonds.
• December 31: Accrued interest on the bonds.

Required:

1. Prepare the journal entries for the bond issuance, interest payments, and accrued interest.
2. Calculate the total interest expense for the year ending December 31, 20X1.
3. Prepare the balance sheet extract showing the bonds payable and accrued interest as of December 31, 20X1.
4. Discuss the impact of the bond issuance on the company’s leverage and interest coverage ratios.