Instructions Chowan Corporation issued $115,000 of 9% bonds dated January 1, Year 1, for $111,283.65 on January 1, Year 1. The bonds are due December 31, Year 1, were issued to yield 10%, and pay interest semiannually on June 30 and December 31. Chowan uses the effective interest method of amortization. Required: Prepare the journal entries to record the issue of the bonds on January 1, Year 1, and the interest payments on June 30, Year 1, December 31, Year 1, and June 30, Year 2. In addition, prepare a bond interest expense and discount amortization schedule for the bonds through June 30, Year 2. Chart of Accounts CHART OF ACCOUNTS Chowan Corporation General Ledger ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 255 Bonds Payable 256 Premium on Bonds Payable 257 Discount on Bonds Payable 261 Income Taxes Payable REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense EQUITY 311 Common Stock 331 Retained Earnings General Journal Shaded cells have feedback. Prepare the journal entries to record the issue of the bonds on January 1, Year 1, and the interest payments on June 30, Year 1, December 31, Year 1, and June 30, Year 2. General Journal Instructions How does grading work? 1 DATE Jan. 1 Cash GENERAL JOURNAL ACCOUNT TITLE POST. REF. DEBIT 111,283.65 PAGE 1 Score: 108/112 CREDIT 2 Discount on Bonds Payable 3,716.35 3 Bonds Payable 115,000.00 4 Jun. 30 Interest Expense 5,564.18 5 Discount on Bonds Payable 389.18 6 Cash 5,175.00 7 Dec. 31 8 Interest Expense Discount on Bonds Payable 5,583.64 5,175.00 9 Cash 408.65 How does grading work? GENERAL JOURNAL DATE ACCOUNT TITLE 1 Jun. 30 Interest Expense 2 3 Discount on Bonds Payable Cash PAGE 2 Score: 33/37 POST. REF. DEBIT CREDIT 5,604.07 5,175.00 429.07 Points: 20.25/21 Points: 6.24/7 Analysis Prepare a bond interest expense and discount amortization schedule for the bonds through June 30, Year 2. Analysis Instruction CHOWAN CORPORATION Bond Interest Expense and Discount Amortization Schedule (Partial) Effective Interest Method 9% Bonds Sold to Yield 10% Date Cash Credit Interest Expense Debit Unamortized Discount Credit Book Value of Bonds 01/01/Year 1 $ $ $ $ 06/30/Year 1 $ $ $ $ 12/31/Year 1 $ $ $ $ 06/30/Year 2 $ $ $ $ Shaded cells have feedback.