On June 30, 2020, Pronghorn Company issued $4,880,000 face value of 13%, 20-year bonds at $5,247,120, a yield of 12%. Pronghorn uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.

(1)The issuance of the bonds on June 30, 2020.(2)The payment of interest and the amortization of the premium on December 31, 2020.(3)The payment of interest and the amortization of the premium on June 30, 2021.(4)The payment of interest and the amortization of the premium on December 31, 2021.

NO.	DATE	ACCOUNT TITLES AND EXPLANATION	DEBIT	CREDIT
1	6/30/20	CASH	?
		PREMIUM ON BONDS PAYABLE		?
		BONDS PAYABLE		?
2	12/31/20	INTEREST EXPENSE	?
		PREMIUM ON BONDS PAYABLE	?
		CASH		?
3	6/30/21	INTEREST EXPENSE	?
		PREMIUM ON BONDS PAYABLE	?
		CASH		?
4	12/31/20	INTEREST EXPENSE	?
		PREMIUM ON BONDS PAYABLE	?
		CASH		?

Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2021, balance sheet.

PRONGHORN COMPANY

BALANCE SHEET

DEC. 31,20

LONG-TERM LIABILITIES
BONDS PAYABLE	?
PREMIUM ON BONDS PAYABLE	?
BOOK VALUE OF BONDS PAYABLE	?

(1) What amount of interest expense is reported for 2021? (Round answer to 0 decimal places, e.g. 38,548.)

Interest Expense reported for 2021 $____________

(2) Determine the total cost of borrowing over the life of the bond

Total cost of borrowing over the life of the bond $________________