Problem 6-4

Requirement 1
Interest expense for 2022 (3,802,600 x 10%) 380,560
Interest paid 320,000
Discount amortization -2022 60,560

Bonds payable 4,000,000

Issue price 3,805,600
Discount on bonds payable 194,400
Amortization -2022 60,560
Discount on bonds payable 133,840

Bonds payable 4,000,000

Payment on 12/31/2023 800,000
Bond payable -12/31/2023 3,200,000
Discount on bonds payable 133,840
Carrying amount 3,066,160

Requirement 2

Cash 3,805,600
Discount on bonds payable 194,400
Bonds payable 4,000,000

Interest expense 320,000

Cash 320,000

Interest expense 60,560

Discount on bonds payable 60,560

Bonds payable 800,000

Cash 800,000