The long-term debt section of Karidis Corporation€™s balance sheet at the end of its fiscal year, December 31, 2013, follows.

Using the effective interest method, prepare the journal entries relevant to the interest payments on July 1, 2014, December 31, 2014, and January 1, 2015. Assume a market interest rate of 10percent.

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Long-term liabilities Bonds payable 8%, interest payable 1/1 and 7/1, due 12/31/16 Less unamortized bond discount $500,000 40,000 $460,000