GIT, Inc., issued $600,000 of 5%, 12-year bonds payable at a price of 77 on March 31, 2010. The market interest rate at the date of issuance was 8%, and the GIT bonds pay interest semiannually.
1. Prepare an effective-interest amortization table for the bonds through the first three interest payments. Round amounts to the nearest dollar.
2. Record GIT, Inc.’s issuance of the bonds on March 31, 2010, and payment of the first semiannual interest amount and amortization of the bond discount on September 30, 2010. Explanations are not required.