Vieques Corporation sells scenic sightseeing trips to rural towns in Puerto Rico.Over the last several years, the company has become interested in purchasing a used airplane.Instead of issuing common stock, the company decides to issue bonds.The company issued $1,000,000 of 8% three-year bonds at 97 on January 1, 2018.Interest is paid semiannually on January 1 and July 1.Vieques Corporation uses the straight-line method of amortization.

The corporation would like to better understand the bond issue. Using the table below as a guide, calculate the interest expense, amortization of any discount, and the carrying value of the bond at the end of each year for the life of the bond.

Date

Interest paid

Amortization of discount

Discount

Carrying value of bond

Jan. 1, 2018

Jul. 1, 2018

Dec. 31, 2018

Jul. 1, 2019

Dec. 31, 2019

Jul. 1, 2020

Dec. 31, 2020

• Make the appropriate journal entries for each of the following events:
• 2018
• January 1 - Bond issuance
• July 1 - Interest payment
• December 31 - Record any accrued interest on the bonds
• 2020
• December 31 - Bond redemption at maturity