Woode Corporation issued \(\$ 400,000,7 \%, 20\)-year bonds on January 1, 2025, for \(\$ 360,727\). This price resulted in an effective-interest rate of \(8 \%\) on the bonds. Interest is payable annually on January 1 . Woode uses the effective-interest method to amortize bond premium or discount.

Instructions

Prepare the journal entries to record (round to the nearest dollar):

a. The issuance of the bonds.

b. The accrual of interest and the discount amortization on December 31, 2025.

c. The payment of interest on January 1, 2026 .