Gary Miller Corporation wholesales bike parts to bicycle manufac 1 answer below »

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