Bond Issued at Premium Gigantic Enterprises issues bonds with a par value of $700,000 on January 1, 2001, and receives $724,000. The stated interest rate on the bonds is 10 percent and interest is paid annually on December 31. The bonds mature on December 31, 2006. Gigantic uses straightline amortization of bond discounts and premiums.

a. What amount of interest payment will Gigantic make on December 31, 2001?

b. What amount of interest expense will Gigantic record on December 31, 2001?

c. Give the balance sheet presentation of the bond liability at December 31, 2001.

d. Give the journal entries recorded by Gigantic Enterprises during 2001 and 2002.