SHORT PROBLEM $2(20$ points$)$

On June $1,2022,$ LASTT Company sold $400,000$ in long$-$term bonds for $351,040.$ The bonds will mature in $10$ years and have a stated interest rate of $8\%$ and a yield rate of $10\%.$ The bonds pay interest annually on May $31$ of each year. The bonds are to be accounted for under the effective$-$interest method.

Instructions

$($a$)$ Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May $31.$ Include only the first four years. Make sure all columns and rows are properly labeled. $($Round to the nearest dollar.$)$

$($b$)$ Assuming that interest and discount amortization are recorded each May $31,$ prepare the adjusting entry to be made on December $31,2024.($Round to the nearest dollar.$)$SHORT PROBLEM $2(20$ points$)$

On June $1,2022,$ LASTT Company sold $400,000$ in long$-$term bonds for $351,040.$ The bonds will mature in $10$ years and have a stated interest rate of $8\%$ and a yield rate of $10\%.$ The bonds pay interest annually on May $31$ of each year. The bonds are to be accounted for under the effective$-$interest method.

Instructions

$($a$)$ Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May $31.$ Include only the first four years. Make sure all columns and rows are properly labeled. $($Round to the nearest dollar.$)$

$($b$)$ Assuming that interest and discount amortization are recorded each May $31,$ prepare the adjusting entry to be made on December $31,2024.($Round to the nearest dollar.$)$