Exercise $10\mathrm{.}10($Algo$)$ Accounting for Bonds Issued at a Discount: Issuance, Interest Payments, and

Retirement $($LO$10-5,$ LO$10-6)$

Mellilo Corporation issued $$6\mathrm{.}0$ million of $20-$year, $9\mathrm{.}5$ percent bonds on July $1,2024,$ at $98.$ Interest is due on June $30$ and December

$31$ of each year, and all of the bonds in the issue mature on June $30,2044.$ Mellilo's fiscal year ends on December $31.$ Prepare the

following journal entries:

Required:

a$.$ July $1,2024,$ to record the issuance of the bonds.

b$.$ December $31,2024,$ to pay interest and amortize the bond discount.

c$.$ June $30,2044,$ to pay interest, amortize the bond discount, and retire the bonds at maturity $($make two separate entries$).$

d$.$ What is the effect of amortizing the bond discount upon $(1)$ annual net income and $(2)$ annual net cash flow from operating activities.

$($Ignore possible income tax effects.$)$

Complete this question by entering your answers in the tabs below.

Req $A$ to $C$

a$.$ July $1,2024,$ to record the issuance of the bonds.

b$.$ December $31,2024,$ to pay interest and amortize the bond discount.

c$.$ June $30,2044,$ to pay interest, amortize the bond discount, and retire the bonds at maturity $($make two separate entries$).$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Enter your answers in

dollars not in millions.