Question: The following data relate to an $8,000,000, 7% bond issue for a selected semiannual interest period: Bond carrying amount at beginning of period .... $8,190,000

The following data relate to an $8,000,000, 7% bond issue for a selected semiannual interest period:
Bond carrying amount at beginning of period .... $8,190,000
Interest paid at end of period ............. 560,000
Interest expense allocable to the period ......... 540,500
a. Were the bonds issued at a discount or at a premium?
b. What expense account was decreased to amortize the discount or premium?

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