On January 1, 2021, a company issues 3-year bonds with a face value of $560,000 and a stated interest rate of 8%. Because the market interest rate is higher than the stated interest rate, the company receives $543,200 for the bonds.

Required:

a. Determine the amount of the discount that will be amortized during the year ending December 31, 2021 using the straight-line method of amortization.

b. Prepare the journal entry to record the first interest payment on December 31, 2021.