The following transactions were completed by Michura Inc., whose fiscal year is the calendar year:

{Instructions}
1. Journalize the entries to record the foregoing transactions.
2. Indicate the amount of the interest expense in

(a) 2007 and

(b) 2008.
3. Determine the carrying amount of the bonds as of December 31, 2008.objs. 2, 3

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2007 July 1. Issued $12,000,000 of 10-year, 9% callable bonds dated July 1, 2007, at an effec- tive rate of 11%, receiving cash of $11,252,273. Interest is payable semiannually on December 31 and June 30. Dec. 31. Paid the semiannual interest on the bonds. 2008 31. Recorded bond discount amortization of $37,386, which was determined by using the straight-line method. 31. Closed the interest expense account. June 30. Paid the semiannual interest on the bonds. Dec. 31. Paid the semiannual interest on the bonds. 31. Recorded bond discount amortization of $74,772, which was determined by using the straight-line method. 31. Closed the interest expense account.