The entry to record the semiannual payment and amortization of the discount using the straight-line method on a 10%,$200,000,5-year bond issued at 97 would be to:

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The semiannual interest payment is calculated as ($200,000 x 10% x 6/12) = $10,000. Since the bond was issued at a discount, the discount of $3,000 ($200,000 - $194,000) needs to be amortized over the life of the bond using the straight-line method, which results in an amortization of $600 ($3,000/5). Therefore, the entry to record the semiannual payment and amortization of the discount using the straight-line method would be to debit Bond Interest Expense for $10,600 ($10,000 interest payment + $600 discount amortization), credit Cash for $10,000, and credit Discount on Bonds Payable for $600.

The Entry to Record the Semiannual Payment and Amortization of the Discount