1. Journalize the following transactions of Trekker Boot Company:

2017

Jan. 1 Issued $600,000 of 8%, 10-year bonds at 97.

July 1 Paid semi-annual interest and amortized bonds by the straight-line method on the 8% bonds payable.

Dec. 31 Accrued semi-annual interest expense and amortized bonds by the straight-line method on the 8% bonds payable.

2018

Jan. 1 Paid semi-annual interest.

2027

Jan. 1 Paid the 8% bonds at maturity.

2. At December 31, 2017, after all year-end adjustments, determine the carrying amount of Trekker's bonds payable, net.

3. For the six months ended July 1, 2017, determine the following for Trekker:

a. Interest expense

b. Cash interest paid

What causes interest expense on the bonds to exceed cash interest paid?