(Solution) - Polk Incorporated issued 200 000 of 13 bonds on July 1 -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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Polk Incorporated issued $200,000 of 13% bonds on July 1, 2013, for $206,801.60. The bonds were dated January 1, 2013, pay interest on each June 30 and December 31, are due December 31, 2017, and were issued to yield 12%. Polk uses the effective interest method of amortization.
Required:
Prepare the journal entries to record the issue of the bonds on July 1, 2013, and the interest payments on December 31, 2013, and June 30, 2014. In addition, prepare a bond interest expense and premium amortization schedule for the bonds through June 30, 2014.