On January 1, 2018, Bochini Corporation sold a $10 million, 8.25 percent bond issue. The bonds were dated January 1, 2018, had a yield of 8 percent, pay interest each December 31, and mature 10 years from the date of issue.

Required:
1. Prepare the journal entry to record the issuance of the bonds.
2. Prepare the journal entry to record the interest payment on December 31, 2018. Use effective-- interest amortization.
3. Show how the bond interest expense and the bonds payable should be reported on the annual financial statements for 2018