On January 1, 2020, Everly Bottle Company sold long-term bonds with a face value of $3,000,000 at a price of $2,768,304. The bonds will mature in 5 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest July 1 and January 1 of each year. The bonds are to be accounted for under the effective-interest method.

Instructions:

1. Prepare a Bond Discount/ Premium Amortization Schedule.

2. Prepare the journal entry to record the bonds on the date of issue, January 1, 2020.

3. Prepare the journal entry to record the first payment and amortization of the discount/premium on July 1, 2020.

4. Prepare the journal entry to record the accrued interest and amortization of the discount/premium on December 31, 2020.

5. Prepare the journal entry to record the payment of the bonds at maturity; January 1, 2025.Assume the appropriate accrual was made on December 31, 2024 (see 4. above)