On January 1, 2019, Learned Inc, issued $16 million face amount of 20-year, 14% stated rate bonds when market interest rates were 16%. The bonds pay interest semiannually each June 30 and December 31 and mature on December 31, 2038. Table 6-4, Table 6-5 (Use appropriate factor from the table provided.)

B. Assume instead that the proceeds were $16,340,000. Use the horizontal model to record the payment of semiannual interest and the related premium amortization on June 30, 2019, assuming that the premium of $340,000 is amortized on a straight-line basis. Indicate the financial statement effect.