Shareholder's Equity Section from the image file details.
Assume Dollar General Stores, Inc., is authorized to issue $500,000 of 7%, 10-year bonds payable. On December 31, 20X6, when the market interest rate is 8%, the company issues $400,000 of the bonds and receives cash of $372,660. Dollar General amortizes bonds by the effective-interest method. The semiannual interest dates are June 30 and December 31.
Required:
1. Prepare a bond amortaization table for the first four semiannual interest periods.
2. Record issuance of the bonds payable on December 31, 20X6, the semiannual interest payment on June 30, 20X7, and the payment on December 31, 20X7.