On January 1, 2016, Twain Corp. sold $500,000 of its own 7 percent, 10-year bonds. Interest is payable annually on December 31. The bonds were sold to yield an effective interest rate of 8 percent. Twain uses the effective interest rate method. The bonds sold for $466,450.
b. Prepare the journal entry for the amortization of the bond discount and the payment of the interest at December 31, 2016. (Assume effective interest amortization.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest dollar amount.)
c. Prepare the journal entry for the amortization of the bond discount and the payment of interest on December 31, 2016. (Assume straight-line amortization.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest dollar amount.)
d. Calculate the amount of interest expense for 2017. (Assume effective interest amortization.) (Round your intermediate calculations and final answer to the nearest dollar amount.)
e. Calculate the amount of interest expense for 2017. (Assume straight-line amortization.) (Round your answer to the nearest dollar amount.)