Problem: Amortization of a Bond

On January 1, 2014, Sunset Corporation issued $4,000,000, 8%, 5 year bonds dated January 1, 2014,

at 95. The bonds pay semiannual interest on January 1 and July 1. The company uses the straight-

line method of amortization and has a calendar year end. Prepare all the journal entries the company

would make related to this bond issue through January 1, 2015. Be sure to indicate the date on which the

entries would be made. There are four journal entries. Show all the work and steps.