Bonds Payable Journal Entries; Effective Interest Amortization On December 31, 2011, Coffey Company issued $700,000 of 15-year, 10% bonds payable for $754,780, yielding an effective interest rate of 8%. Interest is payable semiannually on June 30 and December 31. Prepare journal entries to reflect (a) the issuance of the bonds, (b) the semiannual interest payment and premium amortization (effective interest method) on June 30, 2012, and (c) the semiannual interest payment and premium amortization on December 31, 2012. Round amounts to the nearest dollar. General Journal Description Date Debit Credit a.) Dec.31 Cash . $ 754,780 $ 0 0 Premium on Bonds Payable Bonds Payable To record issuance of bonds. 54,780 700,000 O - X 0 X 0 35,000 b.) Jun.30 Bond Interest Expense Premium on Bonds Payable Cash To record semiannual interest payment and premium amortization. C.) Dec.31 Bond Interest Expense Premium on Bonds Payable Cash To record semiannual interest payment and premium amortization. X 0 X 0 35,000