Splish Brothers Inc. issued $7,440,000 of 8% bonds on October 1, 2016, due on October 1, 2021. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to yield 10% effective annual interest. Splish Brothers Inc. closes its books annually on December 31.

Complete the following amortization schedule for the dates indicated. Use the effective-interest method Prepare the adjusting entry for December 31, 2017. Use the effective-interest method. Compute the interest expense to be reported in the income statement for the year ended December 31, 2017. Interest expense