Answer:
White Water
1. Schedule
Date            Cash Paid     Interest Expense   Increase in Carrying value  FV
01/01/2021	0                                                                           $570,000.00	
12/31/2021    $39,900.0       $39,900.00     0                       $570,000.00
12/31/2022  $39,900.0       $39,900.00     0                       $570,000.00
2. January 1, 2021:
Debit Cash $570,000
Credit 7% Bonds Payable $570,000
To record the issue of bonds for cash.
December 31, 2021:
Debit Interest Expense $39,900
Credit Cash $39,900
To record the first interest payment.
December 31, 2022:
Debit Interest Expense $39,900
Credit Cash $39,900
To record the second interest payment.
Explanation:
a) Data and Calculations:
Face value of 7% bonds = $570,000
Proceeds from the bond issue = $570,000
No premiums, no discounts on bonds.
Coupon interest rate = 7%
Market interest rate = 7%