On June 30, 2017, Carla Company issued $3,800,000 face value of 13%, 20-year bonds at $4,085,872, a yield of 12%. Carla uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.

(a)

	Your answer is correct.

Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(1)		The issuance of the bonds on June 30, 2017.
(2)		The payment of interest and the amortization of the premium on December 31, 2017.
(3)		The payment of interest and the amortization of the premium on June 30, 2018.
(4)		The payment of interest and the amortization of the premium on December 31, 2018.

No. Date Account Titles and Explanation Debit Credit (1) June 30, 2017 Cash 4085872|| Bonds Payable 3800000 Premium on Bonds Payable T 285872 (2) December 31, 2017 Interest Expense 5152 Premium on Bonds Payable 1848 | Cash 2009 247000 (3) June 30, 2018 Tinterest Expense 245041 Premium on Bonds Payable 1959 Cash T 247000 (4) December 31, 2018 Interest Expense 2449247 Premium on Bonds Payable 2076T Cash 247000 Carla Company Balance Sheet December 31, 2018 Long-term Liabilities Bonds Payable 3800000 Premium on Bonds Payable 279990 Book Value of Bonds Payable 4079990 (0) X Your answer is incorrect. Try again. Provide the answers to the following questions. (1) What amount of interest expense is reported for 2018? (Round answer to o decimal places, e.g. 38,548.) Interest expense reported for 2018 J 244924 (2) Will the bond interest expense reported in 2018 be the same as, greater than, or less than the amount that would be reported if the straight-line method of amortization were used? less than The bond interest expense reported in 2018 will be the amount that would be reported if the straight-line method of amortization were used. (3) Determine the total cost of borrowing over the life of the bond. (Round answer to 0 decimal places, e.g. 38,548.) Total cost of borrowing over the life of the bond 4085872 (4) Will the total bond interest expense for the life of the bond be greater than, the same as, or less than the total interest expense if the straight-line method of amortization were used? less than The total bond interest expense for the life of the bond will be the total interest expense if the straight-line method of amortization were used