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.

Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2018, balance sheet. (Round answers to 0 decimal places, e.g. 38,548.)

Account Titles and Explanation Debit Credit No. Date (1) June 30, 2017 Cash T Bonds Payable 3800000 - Premium on Bonds Payable 285872 (2) December 31, 2017 Interest Expense Premium on Bonds Payable | Cash 247000 (3) June 30, 2018 Interest Expense Premium on Bonds Payable Cash 247000 (4) December 31, 2018 Interest Expense Premium on Bonds Payable Cash 247000 Carla Company Balance Sheet