Romero issues 3,400,000 of 10%, 10 year bonds dated January 1 20133 that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of 3,010,000.

1. Prepare the January 1 2013 journal entry to record the bonds issuance.

2. for each semiannual period, compute (a) the cash payment, (b) the straight line discount amortization, and (c) the bond interest expense.

ANSWER THE QUESTION IN THE FOLLOWING FORMAT: # 1. Bond Issuance:
			Debit	Credit
	Cash		3,010,000
	Discount on Bonds Payable		390,000
	Bond Payable			3,400,000
Interest computatuions in accordance with Exhibit 14.7 in textbook
# 2. Each semi-annual period:
10%
	Interest Expense
	Discount on Bonds Payable
	Cash
#3. Total bond interest expense recognized over bond's life=