Kingsport Corporation issued $25,000,000 of 7.5%, 20-year bonds on March 1, 2021. Interest on these bonds is paid semiannually on March 1 and September 1 of each year. On the issue date the bonds were priced to yield a market rate of interest of 6.70%. Kingsport uses the effective-interest method to amortize any premium or discount.

Required:

Prepare the journal entries to record the following items. Identify each entry with the corresponding number.

1. Prepare the journal entry on March 1, 2021, to record the issuance of the bonds.
2. Prepare the journal entry on September 1, 2021, to record the interest payment on that date.
3. Prepare any adjusting entry that would be required on December 31, 2021 (Kingsports year-end date).
4. Prepare the journal entry on March 1, 2022, to record the interest payment on that date. Assume that Kingsport does not use reversing entries.

Skip a space between journal entries. Show all calculations and round your answers to the nearest whole dollar. Explanations are not required.

Item Accounts - Explanations are not required Debits Credits Show calculations here