On January 1, 201X, Lonny Corporation sold $400,000 of 10%, 10-year bonds at 97. Interest is to be paid on June 30 and December 31. The straightline method of amortizing the discount is used. Prepare (1) an amortization schedule for the first three semiannual periods and
(2) journal entries to record the following:
a. Bond issue on January 1.
b. Semiannual interest payments on June 30 and December 31 for interest and amortization of discount.
c. If the bonds were issued on March 1 and interest was paid on September 1 and March 1, what would be the year-end adjusting entry on December 31 to record accrued interest and amortization of discount?