On January 1, 2021, Darnell Window and Pane issued $18.5 million of 10-year, zero-coupon bonds for $6,515,413. (FV of $1,PV of $1,FVA of $1,PVA of $1,FVAD of $1andPVAD of $1)(Use appropriate factor(s) from the tables provided.)

Required:

2.Determine the effective rate of interest.

1. & 3. to 5.Prepare the necessary journal entries.

Interest rate

%

• Record the issuance of the bonds.

Note: Enter debits before credits.

DateGeneral JournalDebitCreditJanuary 01, 2021

• Record annual interest expense at December 31, 2021.

Note: Enter debits before credits.

DateGeneral JournalDebitCreditDecember 31, 2021

• Record annual interest expense at December 31, 2022.

Note: Enter debits before credits.

DateGeneral JournalDebitCreditDecember 31, 2022

• Record the payment at the bonds' maturity.

Note: Enter debits before credits.

DateGeneral JournalDebitCreditDecember 31, 2030