On 1/1/2014 the Jackson Co. has a $40,000 debt outstanding which matures on 12/31/16. Interest which is payable on Dec. 31 of each year, was last paid on 12/31/13.. Jackson negotiates a restructure in which the 3 remaining interest payments are $2,400 each and the amount to be paid at maturity is $38,739. Using the effective interest method, how much interest expense is recognized on the debt for the year ending 12/31/14?
1. In recording the bond issue following GAAP, HTL would credit equity by how much?
2. In recording the bond issue, how much discount on bonds payable would be recorded?