Cupola Fan Corporation issued 10%, $400,000, 10-year bonds for $385,000 on June 30, 2000. Debt issue costs were $1,500. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2001), the corporation exercised its call privilege and retired the bonds for $395,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs.

1. Record payment of interest for December 31, 2000.

2. Record payment of interest for June 30, 2001.