Explanation:
The journal entries are shown below:
a. On January 1
Cash A/c Dr $288,000 ($300,000 × 96%)
Discount on Note payable A/c Dr $12,000
To Note Payable A/c $300,000
(Being the note payable is recorded at discount)
b. On July 1
Interest expense A/c Dr $13,500
To Discount on bonds payable A/c $1,500 ($12,000 ÷ 8)
To Cash A/c $12,000 ($300,000 × 8% ÷ 2)
(Being interest expense is recorded)
c. On December 31
Interest expense A/c Dr $13,500
To Discount on bonds payable A/c $1,500 ($12,000 ÷ 8)
To Cash A/c $12,000 ($300,000 × 8% ÷ 2)
(Being interest expense is recorded)