Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Smiley issued $1,200,000 of 7-year, 11% bonds at a market (effective) interest rate of 9%, receiving cash of $1,322,674. Interest is payable semiannually on April 1 and October 1.

Journalize the entry to record the first interest payment on October 1, Year 1, and amortization of bond premium for six months, using the straight-line method. (Round to the nearest dollar.) If an amount box does not require an entry, leave it blank.

	Interest Expense
	Premium on Bonds Payable
	Cash