Presented below is the partial bond discount amortization schedule for Ferree Corp. Ferree uses the effective-interest method of amortization.

(a) Prepare the journal entry to record the payment of interest and the discount amortization at the end of period 1.
(b) Explain why interest expense is greater than interest paid.
(c) Explain why interest expense will increase eachperiod.

Interest Bond Semiannual Interest to Expense to Discount Unamortized Carrying Interest Periods Be Paid Be Recorded Amortization Discount Value $62,3 $937,689 60,427 939,573 58,448 941,552 Issue date $45,000 $46,884 46,979 $1,884 1,979 45,000