On the first day of the fiscal year a company issues a $7,500,000, 8%, five-year bond that pays semiannual interest of $300,000 ($7,500,000 x 8% x 1/2), receiving cash of $7,811,873, when the market rate was 7%. The company uses the effective interest rate method.

Required:

1. Journalize the entry to record the payment of interest for year 1.
2. Journalize the entry to record the payment of interest for year 2.