Instructions X Polk Incorporated issued $184,000 of 7% bonds on July 1, Year 1, for $191,163.22. The bonds were dated January 1, Year 1, pay interest on each June 30 and December 31, are due December 31, Year 5, and were issued to yield 6%. Polk uses the effective interest method of amortization. Required: Prepare the journal entries to record the issue of the bonds on July 1, Year 1, and the interest payments on December 31, Year 1, and June 30, Year 2. In addition, prepare a bond interest expense and premium amortization schedule for the bonds through June 30, Year 2. Chart of Accounts CHART OF ACCOUNTS Polk Incorporated General Ledger ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Equipment 198 Accumulated REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense Depreciation 521 Salaries Expense 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 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense EQUITY 311 Common Stock 331 Retained Earnings X General Journal Prepare the journal entries to record the issue of the bonds on July 1, Year 1, and the interest payments on December 31, Year 1, and June 30, Year 2. General Journal Instructions 1 2 3 4 5 6 GENERAL JOURNAL DATE ACCOUNT TITLE PAGE 1 POST. REF. DEBIT CREDIT PAGE 2 GENERAL JOURNAL POST. REF. DEBIT CREDIT DATE ACCOUNT TITLE 1 2 3 Analysis Prepare a bond interest expense and discount amortization schedule for the bonds through June 30, Year 2. Analysis Instruction Date 07/01/Year 1 $ 12/31/Year 1 $ 06/30/Year 2 $ POLK INCORPORATED Bond Interest Expense and Discount Amortization Schedule (Partial) Effective Interest Method 7% Bonds Sold to Yield 6% Cash Credit Interest Expense Debit Unamortized Discount Credit Book Value of Bonds $ $