Valuation of Bonds Effective-Interest Method McGee Company issued $400,000 of 8%,5-year bonds on January 1 , 2025 , to yield 6%. Interest is payable semiannually on July 1 and January 1. McGee Company uses the effective interest method of amortization for bond premium or discount. Present value of the principal: Present value of the interest payments: Present value (seiwing price) of the bonds 30 Bond Issuance On issuance (January 1, 2025) Debit Credit Premium on Bond Payable: Adjunct Liability (attached to B/P). Balance Sheet (1/1/25) : 33 Bond Interest Interest (July 1): Using Effective Interest amortization. \begin{tabular}{|l|} \hline Balance Sheet (7/1/25): \\ \\ \\ \end{tabular} Bond Interest Interest (December 31): Using Effective Interest amortization