Problem 10-4A Straight-Line: Amortization of bond discount P2 Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. Required 1. Prepare the January 1 journal entry to record the bonds'issuance. 2. Determine the total bond interest expense to be recognized over the bonds' life. Check (2) $97,819 3. Prepare a straight-line amortization table like the one in Exhibit 10.7 for the bonds' first two years. (3) 12/31/2020 carrying value, $308,589 14. Prepare the journal entries to record the first two interest payments. EXHIBIT 10.7 Straight-Line Amortization of Bond Discount Semiannual Unamortized Period-End Discount Carrying Value (0) 12/31/2019 (1) 6/30/2020 (2) 12/31/2020 (3) 6/30/2021 (4) 12/31/2021 $3,600 2,700 1,800 900 $ 96,400 97,300 98,200 99,100 100,000 0 The columns always sum to par value for discount bonds. Total bond discount of $3,600 less accumulated periodic amortization of $900 per semiannual interest period. Bond par value of $100,000 less tinamortized discount Carrying value SNOODOO SOOD 1,200 200 16400 Point: Amortization always gets the carrying value of a bond closer to its par value 12/31/2019 6/30/2020 12/31/2020 6/30/2021 12/312021