On 30 September 20X1, Golf Mania Co. issued $3 million face-value debentures. The bonds have a nominal interest rate of 10% per annum, payable semi-annually on 31 March and 30 September, and mature in 10 years, on 30 September 20X11. The bonds were issued at a price to yield 8%.
Golf Mania Company’s fiscal year ends on 30 September and the company uses the effective interest method.

Required:
1. Determine the price at which the bonds were issued.
2. Prepare journal entries to record the issuance of the bonds, payment of interest, and all necessary adjustments for the first two years (i.e., through 30 September 20X3).
3. Compute the amount of unamortized bond premium remaining on 1 October 20X7 reflecting the effective interest method, without preparing an amortization schedule.
4. Calculate the amount of premium amortization, for the six months ending 31 March 20X8.