Assume the same information as in E14-4B, except that McGee Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 6% in pricing the bond.
In E14-4B, McGee Company issued $400,000 of 8%, 20-year bonds on January 1, 2014, at 102. Interest is payable semiannually on July 1 and January 1. McGee Company uses the straight-line method of amortization for bond premium or discount.

Instructions
Prepare the journal entries to record the following. (Round to the nearest dollar.)
(a) The issuance of the bonds.
(b) The payment of interest and related amortization on July 1, 2014.
(c) The accrual of interest and the related amortization on December 31, 2014.