Mitchell Inc. issued $200$ of its $6\%,$$$1,000$ bonds on January $1$ of Year $1.$ The bonds pay cash interest semiannually each July $1$ and January $1$ and were issued to

yield $7\%.$ The bonds mature in three years on December $31,$ and the company uses the effective interest method to amortize bond discounts or premiums.

Required

a$.$ Determine the selling price of the bonds.

b$.$ Prepare an amortization schedule for the first year of the bond term.

c$.$ Prepare journal entries on the following dates.

January $1$ of Year $1,$ bond issuance.

July $1$ of Year $1,$ interest payment.

December $31$ of Year $1,$ interest accrual.

January $1$ of Year $2,$ interest payment. $($No reversing entries made.$)$

Note Round amount to the nearest dollar.

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Note: Round amounts in Schedule to the nearest whole dollar.

Note: Do not use negative signs.

Note: Round your answers to the nearest whole dollar.