Sunset Drive-Ins Ltd. issued a $500,000, 8%, 10-year bond payable on July 1, 2010, at a price of 94. Also assume that Sunsets accounting year ends on December 31. Journalize the following transactions for Sunset Drive-Ins Ltd., including an explanation for each entry:
a. Issuance of the bond payable on July 1, 2010.
b. Accrual of interest expense and amortization of bonds on December 31, 2010. (Use the straight-line amortization method, and round amounts to the nearest dollar.)
c. Payment of the first semiannual interest amount on January 1, 2011.