$200,000 of 6%, 25-year bonds were sold for $160,000 on January 1. The bonds require semiannual interest payments on June 30 and December 31. The entry to record the June 30 interest payment on the bonds would be to:

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The bonds were sold at a discount ($160,000 instead of $200,000), so the interest expense includes both the cash interest payment and the amortization of the discount. The cash interest payment is $6,000 (6% of $200,000 divided by 2 for semiannual), and the discount amortization is $800, making the total interest expense $6,800.

$200,000 of 6%, 25-Year Bonds Were Sold for $160,000 on January