Bonds Payable $5,000,000

On January 1, 2012, Primo Corporation issued 8%, 20-year bonds with a face amount of $5,000,000 at 101. Interest is payable semiannually on June 30 and December 31.

Requirements

1. Prepare the entry to record the issuance of the bonds

2. Prepare the entry to record the first semiannual interest payment assuming that the company uses straight-line amortization.