Windchime Inc. issued 10-year bonds with a par value of $20,000,000 and a 9% face rate on January 1, 20X4. The market rate of interest on the bonds is 8%. Interest is paid to bondholders semi-annually on June 30 and December 31 using the effective interest amortization method. The bonds were issued at a price of 106.8.

A. What is the issue price of the bonds? Show your calculation.

B. Are the bonds being issued at a discount or premium? Explain how you know.

C. What is the discount or premium amount? Show your calculation.

D. Provide the journal entry to record the issuance of the bonds.

E. Provide the journal entry to record the interest payment on the bonds on June 30, 20X4 using the effective interest amortization method.

F. What is the carrying value on July 1, 20X4? Show your calculation.