Bonanza Graphics Inc. issued a $200,000, 8%, three-year bond on November 1, 2017, 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, 2017.b. Record the accrual of bond interest at year-end, December 31, 2017, and the subsequent payment on February 1, 2018.

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Period Ending Nov. 1/17............…...... Feb. 1/18......... Aug. 1/20... Nov. 1/20...... ...... Totals ...............….... *Adjusted for rounding. (A) Cash Interest Paid $200,000 x 8% x 3/12 $ 4,000 4,000 4,000 $48,000 (B) Period Interest Expense (E) x 9% x 3/12 $ 4,383 4,478 4,492* $53,208 (C) Discount Amort. (B) - (A) $ 383 478 492 $5,208 (D) Unamortized Discount $5,208 4,825 492 (E) Carrying Value $200,000 - (D) $194,792 195,175 199,508 200,000