Gary Miller Corporation wholesales bike parts to bicycle manufacturers. On March 1, 2010, Gary Miller Corporation issued

Question:

Gary Miller wholesales bike parts to bicycle manufacturers. On March 1, 2010, Gary Miller issued $8,000,000 of five-year, 14% bonds at an effective interest rate of 12%, receiving cash of $8,588,850. Interest is payable semiannually. Gary Miller Corporation’s fiscal year begins on March 1.
(a) Journalize the entries to record the following:
1. Sale of the bonds.
2. First semiannual interest payment, including amortization of premium.
3. Second semiannual interest payment, including amortization of premium.
(b) Determine the bond interest expense for the first year.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...