On January 1, 2019, a Salty Beach City sold $1,000,000, 12%, 10-year bonds at an effective interest rate of 10%. The bonds pay interest semi-annually on January 1 and July 1.

1.Record the sale of the bonds on 1/1/19 in the appropriate fund journal and in the governmental activities journal.

2.Using the effective interest method, prepare an amortization schedule for the first two payments of the bonds.

3.Record the first interest payment in the appropriate fund journal and in the governmental activities journal.