Bozena Inc. issued a $200,000, 8%, three-year bond on November 1, 2014, for cash of $194,792. Interest is to be paid quarterly. The annual market rate of interest is 9%. Assume a year-end of December 31. The amortization schedule, using the effective interest method, is shown below:

a. Record the issuance of the bond on November 1, 2014.
b. Record the accrual of bond interest at year-end, December 31, 2014, and the subsequent payment on February 1,2015.

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Cash Interest Pald $200,000 x Period Interest Expense Discount Amort. Carrying Value Unamortized Period Ending 8% x 3/12 (E) x 9% x 3/12 (B) - (A) Discount $200,000- (D) $5,208 4,825 $194,792 195,175 5 4,000 S 4,383 $ 383 4,478 4,492* $53,208 199,508 200,000 492 Aug. 1/17. Nov. 1/17.. . 4,000 4,000 $48,000 478 492 $5,208