On Jan. 1, 2016 Company A issued a 5-year bond with a future value of 600,000 and an interest rate of 12% payable semi-annually on June 30 and December 31. The prevailing rate of interest of this type of bond at the date of issue was 10%.

Prepare the journal entry to record the payment of interest on 12/31/2016 on Company As books using the effective interest method of amortization of bond premium or discount?

Please do not copy from Chegg. Only attempt if you are sure about the answer. Solve in a step by step manner, explaining each step.