On January 1, 2017, Blue Company issued $1,810,000 face value, 7%, 10-year bonds at $1,943,218. This price resulted in a 6% effective-interest rate on the bonds. Blue uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on each January 1.

A. Prepare the journal entries to record the following transactions. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

1.		The issuance of the bonds on January 1, 2017.
2.		Accrual of interest and amortization of the premium on December 31, 2017.
3.		The payment of interest on January 1, 2018.
4.		Accrual of interest and amortization of the premium on December 31, 2018.

B. Show the proper long-term liabilities balance sheet presentation for the liability for bonds payable at December 31, 2018. (Round answers to 0 decimal places, e.g. 125.)

C. Provide the answers to the following questions. 1. What amount of interest expense is reported for 2018? (Round answer to 0 decimal places, e.g. 125.)

Interest expense to be reported

$ enter Interest expense in dollars

2. The bond interest expense reported in 2018 would be (select an option: greater than, less than, same as) the amount that would be reported if the straight-line method of amortization were used.