Hillside issues $2,400,000 of 9%, 15-year bonds dated January 1, 2013, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $2,073,868. Required:

1. Prepare the January 1, 2013, journal entry to record the bonds' issuance.

"Record the issue of bonds with a par value of $2,400,000 cash on January 1, 2013 at an issue price of $2,073,868."

2(a). For each semiannual period, complete the table below to calculate the cash payment.

| Par (maturity) value | | Annual Rate | | Year | = | Semiannual cash interest payment |

2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization.

| Par (maturity) value | | Bonds price | = | Discount on Bonds Payable | | Semiannual periods | = | Straight-line discount amortization |

2(c) For each semiannual period, complete the table below to calculate the bond interest expense.

| Semiannual cash payment | | Discount amortization | = | Bond interest expense |

3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.

"Total bond interest expense over life of bonds: Amount repaid:

| | payments of | |

Par value at maturity | |

Total repaid | |

Less amount borrowed | |

Total bond interest expense | |

4. Prepare the first two years of an amortization table using the straight-line method.

Semiannual Period-End | Unamortized Discount | Carrying Value

01/01/2013 | Unamortized Discount | Carrying Value |

06/30/2013 | Unamortized Discount | Carrying Value |

12/31/2013 | Unamortized Discount | Carrying Value |

06/30/2014 | Unamortized Discount | Carrying Value |

12/31/2014 | Unamortized Discount | Carrying Value |

5. Prepare the journal entries to record the first two interest payments.

"Record the first interest payment on June 30, 2013."

"Record the second interest payment on December 31, 2013."