1. A company has an investment in 7% bonds with a par value of $150,000 that pay interest on October 1 and April 1. The amount of interest accrued on December 31 (the company's year-end) would be:

2. On July 1, Shady Creek Resort borrowed $300,000 cash by signing a 10-year, 6% installment note requiring equal payments each June 30 of $40,760. What is the journal entry to record the first annual payment?