Interest Payments and Interest Expense for Bonds (Straight Line) On January 1, Harrington Corporation sold $92,000 of 15-year, 11% bonds. The bonds sold for $88,000 and pay interest semiannually on June 30 and December 31. Required: 1. Prepare the journal entry to record the sale of the bonds. If an amount box does not require an entry, leave it blank. Jan. 31 Cash 88,000 Discount on Bonds Payable 4,000 Bonds Payable 92,000 Record issuance of bonds at discount Feedback Check My Work 1. When bonds are issued, any premium or discount is recorded in a separate valuation account. 2. Calculate the amount of the semiannual interest payment. Round your answer to the nearest whole dollar and use the same in subsequent calculations. 5,060 $ Feedback Check My Work 2. When calculating interest, consider the principal, the annual interest rate and the time period. 3. Prepare the entry for the first interest payment on June 30 to recognize the payment of interest and interest expense. If an amount box does not require an entry, leave it blank. June 30 Interest Expense 5,060 X Discount on Bonds Payable 1,000 Cash 4,060 x Record interest expense Feedback Check My Work 3. When bonds are issued, any premium or discount is recorded in a separate valuation account. 4. Calculate the annual interest expense for the first year. 10,120 x Feedback Check My Work 4. Any premium is amortized to interest expense over the life of the bond. Feedback Check My Work Partially correct