On January $1,2020,$ Ivanhoe Enterprises issued $9\%,10-$year bonds with a face amount of $$940,000$ at $96.$ Interest is payable annually on January $1.$ The bonds were issued for an effective interest rate of $10\%.$

Prepare the entries to record the issuance of the bonds and the first annual interest accrual and amortization assuming that the company uses effective$-$interest amortization. $($Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. List all debit entries before credit entries.$)$

Date Account Titles and Explanation

Debit

Credit

Cash

Bonds Payable

Premium on Bonds Payable

Dec. $31vv,$ Interest Expense

Interest Expense

Premium on Bonds Payable