On January $1,$ Year $1,$ the Diamond Association issued bonds with a face value of $$220,000,$ a stated rate of interest of $10$ percent, and

a $10-$year term to maturity. Interest is payable in cash on December $31$ of each year. The effective rate of interest was $12$ percent at the

time the bonds were issued. The bonds sold for $$195,139.$ Diamond used the effective interest rate method to amortize the bond

discount.

Required

a$.$ Determine the amount of the discount on the day of issue.

b$.$ Determine the amount of interest expense recognized on December $31,$ Year $1.($Round your answer to the nearest dollar amount.$)$

c$.$ Determine the carrying value of the bond liability on December $31,$ Year $1.($Round your answer to the nearest dollar amount.$)$

d$.$ Provide the general journal entry necessary to record the December $31,$ Year $1,$ interest expense. $($If no entry is required for a

transaction$/$event$,$ select $"$No journal entry required" in the first account field. Round your answers to the nearest dollar amount.$)$

Journal entry worksheet

$1$

Record the interest expense.