On March 1, 2018, Greenway Corporation issued 5% bonds dated January 1, 2018 with a par value of $1,000,000. The bonds were sold for the present value of the bonds on March 1, 2018 plus two-month accrued interest. The bonds mature on December 31, 2023. Interest is paid semiannually on Jun 30 and December 31. Greenway's fiscal year ends on December 31 each year. The effective interest rate is 7%.

Required:

a. Determine the present value the bonds on March 1, 2018 and the amount of accrued interest that was included in the proceeds received from the bond sale. Show calculations.

b. Prepare the journal entry for the issuance of the bonds on March 1, 2018.

c. Prepare the journal entry for the interest payment on June 30, 2018.