On July $1$ of the current year, a company issued bonds dated July $1$ with a par value of $$1,200,000.$ The bonds mature in $10$ years. The contract rate of interest is $10\%,$ and interest is paid semiannually on December $31$ and June $30.$ The bonds are sold for $$1,400,000.$ The company uses the straightline method of amortization.

Required:

$($a$)$ Prepare the journal entry to record issuance of the bonds on July $1$ of the current year $(6$ points possible$).$

$($b$)$ Prepare the journal entry to record the first interest payment on December $31$ of the current year $(6$ points possible$).$