Mercer Corporation acquired $400,000 of Park Company’s bonds on June 30, 2019, for $409,991.12. The bonds carry a 12% stated interest rate and pay interest semi-annually on June 30 and December 31. The appropriate market interest rate is 11%, and the bonds are due June 30, 2022.

Required:
1. Prepare an investment interest income and premium amortization schedule, using the:
a. Straight-line method
b. Effective interest method
2. Prepare journal entries to record the December 31, 2019, and December 31, 2021, interest receipts using both methods.