McGee company issued $400,000 of 8%, 20 year bonds on January 1, 2014, at 102. Interest is Payable semiannually on July 1 and January 1. McGee company uses the effective interest method of amortization for bond premium or discount. Assume an effective yield of %6 in pricing the bond.

Prepare journal entries to record the following. (Round to the nearest dollar)

1. The issuance of the bonds.

2. The payment of the interest and the related amortization on July 1, 2014.

3. The accrual of the interest and the related amortization on December 31, 2014.