On July 1, 2010, Atwater Corporation issued $1,681,700 face value, 9%, 10-year bonds at $1,920,720. This price resulted in an effective-interest rate of 7% on the bonds. Atwater uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest July 1 and January 1.
Instructions
(Round all computations to 0 decimal places, e.g. 125. Use rounded amounts for future computations.)
Prepare the journal entry to record the payment of interest and the amortization of the premium on July 1, 2011, assuming no accrual of interest on June 30. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)