Question: Given the following data: Given the following data: Bonds payable, maturing in 10 years = $8,000,000 Contract interest rate = 5% Market (effective) interest rate

Given the following data:

Bonds payable, maturing in 10 years = $8,000,000

Contract interest rate = 5%

Market (effective) interest rate = 6%

Assume interest is paid annually on January 1. The bonds were issued on January 1 for $7,411,233.

Required:

Prepare the journal entry to record interest expense and any related amortization on December 31 of the first year using the effective interest rate method. Refer to the Chart of Accounts for exact wording of account titles. Round answers to nearest dollar.

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