Problem $2$

On January $1,2024,$ Nicholas Corporation sold $$600,000$ of $12\%$ bonds at $$646,200.$ The bonds are due on January $1,2029,$ and pay interest semiannually every July $1$ and January $1.$ The bonds were sold to yield a $12\%$ effective rate. Nicholas closes its books annually on December $31.$

Required:

$($a$)$ Prepare the gentral journal entry to record the sale of the bonds.

$($b$)$ Prepare the general journal entry to record the interest payment on July $1,2024,$ assuming that Nicholas uses the effective interest method to amortize the bond discount.

$($c$)$ Prepare the general journal entry to record the interest accrual on December $31,2024,$ assuming that Nicholas uses the effective interest method to amortize the bond discount.