On April 1, 20x7, Morimoto Corporation issued $8,000,000 in 8.5 percent, five-year bonds at 98. The semiannual interest payment dates are April 1 and October 1. Prepare entries in journal form for the issue of the bonds by Morimoto on April 1, 20x7, and the first two interest payments on October 1, 20x7, and April 1, 20x8. Use the straight-line method and ignore year-end accruals.

Effective Interest Method