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

Instructions
(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 Interest Interest to Expense to Discount Unaortized Carrying Periods Be Paid Be Recorded Amortization Discoun Value Issue date $45,000 45,000 $46,884 46,979 $1,884 1,979 $62,311 60,427 58,448 $937,689 939,573 941,552