Journalize the following transactions of Applewood Corp.:

2020
Jan. 2 Issued 7 percent, 10-year bonds with a maturity value of $5,000,000. The bonds were sold at 97.00.

Jan. 2 Signed a five-year capital lease on equipment. The agreement requires annual lease payments of $400,000, with the first payment due immediately. The present value of the five lease payments is $1,724,851 (8 percent is the interest rate).

Jul. 2 Paid semi-annual interest and amortized the discount by the straightline method on the 7 percent bonds.

Dec. 31 Accrued semi-annual interest expense and amortized the discount by the straight-line method on the 7 percent bonds.

31 Recorded amortization on the leased equipment using the straight-line method.

31 Accrued interest expense at 8 percent on the lease liability.

2030

Jan. 2 Paid the 7 percent bonds at maturity. (Ignore the final interest payment.)