Problem 10-7A (Part Level Submission) On July 1, 2015, Kellerman Company issued $4,039,400, 896, 10-year bonds at $3,536,004. This price resulted in an effective-interest rate of 10% on the bonds. Kellerman uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest July 1 and January 1. Your answer is correct. Prepare the journal entries to record the following transactions. (Round answers to O decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (1) The issuance of the bonds on July 1, 2015. (2) The accrual of interest and the amortization of the discount on December 31, 2015. (3) The payment of interest and the amortization of the discount on July 1, 2016, assuming no accrual of interest on June 30. (4) The accrual of interest and the amortization of the discount on December 31, 2016. Date Account Titles and Explanation Credit No Debit (1) July 1, 2015 TCash 3,536,004 Discount on Bonds Payable 503,396 Bonds Payable 4,039,400 (2) Dec. 31, 2015 Tinterest Expense 176,800 Discount on Bonds Paya 15,224 161,576 Interest Payable (3) July 1, 2016 TInterest Expense 177,561 15,985 Discount on Bonds Pay Cash 161,576 (4) Dec. 31, 2016TInterest Expense 178,361 16,785 Discount on Bonds Pay 161,576 Interest Payable SHOW LIST OF ACCOUNTSSHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 2 of 5 used (b) Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2016, balance sheet. (For Bonds Payable, Notes Payable and Mortgage payable enter the account name only and do not provide any additional descriptive information e.g. due 2024.) Kellerman Company Balance Sheet December 31, 2016 SHOW LIST OF ACCOUNTS