Current Attempt in Progress

On June $30,2025,$ David Davis Company issued $\backslash (\backslash$$ $3,080,000\mathrm{.}00\backslash )$ face value of $\backslash (14\backslash \%,20\backslash )-$year bonds at $\backslash (\backslash$$ $3,543,420\mathrm{.}00\backslash ),$ a yield of $\backslash (12\backslash \%\backslash ).$ Davis uses the effective$-$interest method to amortize bond premium or discount. The bonds pay semiannual interest on June $30$ and December $31.$

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$($a$)$

Prepare the journal entries to record the following transactions. $($Round answer to $2$ decimal places, e$.$g$.38,548\mathrm{.}25.$ If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.$)$

$1.$ The issuance of the bonds on June $30,2025.$

$2.$ The payment of interest and the amortization of the premium on December $31,2025.$

$3.$ The payment of interest and the amortization of the premium on June $30,2026.$

$4.$ The payment of interest and the amortization of the premium on December $31,2026.$

No$.$

Date

Account Titles and Explanation

Debit Show the proper balance sheet presentation for the liability for bonds payable on the December $31,2026,$ balance sheet. $($Round answers to $2$ decimal places, e$.$g$.38,548\mathrm{.}25.)$

Davis Company Balance Sheet

December $31,2026$

Long$-$Term Liabilities

Bonds Payable

$\backslash$$

$\backslash$$ Provide the answers to the following questions.

$1.$What amount of interest expense is reported for $2026?($Round answer to $2$ decimal places, e$.$g$.\backslash (38,548\mathrm{.}25\backslash ).)$

Interest expense reported for $2026\backslash$$

$2.$ Will the bond interest expense reported in $2026$ be the same as$,$ greater than, or less than the amount that would be reported if the straight$-$line method of amortization were used?

The bond interest expense reported in $2026$ will be the amount that would be reported if the straight$-$line met

$3.$ Determine the total cost of borrowing over the life of the bond. $($Round answer to $0$ decimal places, e$.$g$.38,548.)$

Total cost of borrowing over the life of the bond $\backslash$$

$4.$ Will the total bond interest expense for the life of the bond be greater than, the same as$,$ or less than the total interest expense if the straight$-$line method of amortization were used?

The total bond interest expense for the life of the bond will be the total interest expense if the straight$-$line me