Thunder Bay Parts Corporation (TBPC) has a fiscal year ending on April 30. To finance expansion, TBPC sold $12,000,000 of 4%, five-year bonds at face value plus accrued interest on June 1, 2014. Interest on the bonds is payable semiannually on June 30 and December 31.
a. Journalize the entries to record the following:
1. Sale of the bonds.
2. First semiannual interest payment.
3. Second semiannual interest payment.
4. Adjusting entry for interest at year-end.
b. Determine the amount of the bond interest expense for the year ended April 30, 2015.