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$1,000,000 10% 10 year bonds with semi-annual interest payments were issued at 106 to reflect the market rate of 7%. Required a) Calculate the interest

$1,000,000 10% 10 year bonds with semi-annual interest payments were issued at 106 to reflect the market rate of 7%.

Required

a) Calculate the interest expense using the effective interest method for the first year of the bonds and provide journal entries without explanations to show the issuance of the bonds and the interest payments for the first year.

b) Calculate the interest expense using the straight line interest method for the first year of the bonds and provide journal entries without explanations to show the issuance of the bonds and the interest payments for the first year.

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