Problem 1 (20%) On January 1, 2019, Lock Corporation issued $1,800,000, 5%, 5-year bonds for $1,667,518. The bonds were sold to yield an effective-interest rate of 6%. Interest is paid annually on January 1. The company uses the effective-interest method of amortization. LOCK CORP. Bond Discount Amortization Effective-Interest MethodAnnual Interest Payments 5% Bonds Issued at 6% (A) (B) (C) (D) (E) Interest Discount Unamor- Bond Annual Interest Expense Amor- tized Carrying Interest to Be to Be tization Discount Value Periods Paid Recorded (B) (A) (D) (C) ($1,800,000 - D) Issue date $132,482 $1,667,518 1 $90,000 $100,051 $10,051 122,431 1,677,569 2 90,000 100,654 10,654 111,777 1,688,223 3 90,000 101,293 11,293 100,484 1,699,516 Instructions: Prepare the journal entries that Timber Corporation would make on Jan. 1,2019 when the bonds were issued (a) Dec. 31, 2019 to accrue the interest and record the amortization of the discount (b) Show the balance sheet presentation of the bond at December 31, 2019. (c) At that time, Lock redeemed the bonds at 102, make the entry to record the redemption