Paid the annual payment on the note, which consisted of interest of $25,800 and principal of $32,623.
Accrued $5,961 of interest on the installment note. The interest is payable on the date of the next installment note payment.
Paid the semiannual interest on the bonds. The bond discount is amortized annually in a separate journal entry.
Recorded bond discount amortization of $16,708, which was determined using the straight-line method.
Closed the interest expense account.
Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $50,126 after payment of interest and amortization of discount have been recorded. (Record the redemption only.)
Paid the second annual payment on the note, which consisted of interest of $23,843 and principal of $34,580.
1. Journalize the entries to record the foregoing transactions. For compound transactions, if an amount box does not require an entry, leave it blank or enter "0". When required, round your answers to the nearest dollar.
2. Indicate the amount of the interest expense in (a) 2014 and (b) 2015.