Journal entry to record the issuance of bonds and interest payment on such bonds and Calculation of Bond interest expense.

1.Martin Corp issued $3,000,000 of 8% 20-year bonds payable at par value on Jan 1, 2007. Interest is payable each June 30 and Dec 31. Prepare the general journal entry to record the issuance of the bonds Jan 1, 2007. Prepare the general journal entry to record the first interest payment on June 30, 2007.

2.A company issued 5-year 7% bonds with a par value of $100,000. The company received 97,947 for the bonds. Using the straight-line method, the amount of interest expense for the first semiannual interest period is :

a) $3,294.70

b) $3,500

c) $3,705.30

d) $7,000.00

e) $7410.60