(a) Carla Co. sold $1,950,000 of 12%, 10-year bonds at 106 on January 1, 2017

(a) Carla Co. sold $1,950,000 of 12%, 10-year bonds at 106 on January 1, 2017. The bonds were dated January 1, 2017, and pay interest on July 1 and January 1. If Carla uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2017, and December 31, 2017. (Round answer to 0 decimal places, e.g. 38,548.)

Interest expense to be recorded$ 

(b) Sarasota Inc. issued $570,000 of 9%, 10-year bonds on June 30, 2017, for $471,929. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Sarasota uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2017. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.)

Interest expense to be recorded$ 

1950000*12%*2/12= 39000

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