ISSUING BONDS On January 1, Year 1, a company issued $1,200,000 of bonds for cash of $1,295,844. The bonds mature in five years. The bonds have a stated interest rate of 10% payable annually. The market rate was 8% on the date of issuance. Were these bonds issued at a discount or at a premium? Why? Prepare the journal entry to record the issuance (sale) of the bonds Complete the following interest schedule (assuming straight-line amortization): Cash Interest Carrying Value (Net Liability) Amortization of Premium Date Payment of Interest Expense None None None 1/1/Year! 12/31/Year 1 12/31/Year2 12/31/Year 3 12/31/Year4 12/31/Year 5 Prepare the journal entry to record the first payment of interest on December 31, Year 1