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.