On the First Day of the Fiscal Year, Lisbon Co

Essay

On the first day of the fiscal year, Lisbon Co. issued $1,000,000 of 10-year, 7% bonds for $1,050,000, with interest payable semiannually. Orange Inc. purchased the bonds on the issue date for the issue price. Prepare entries to record the following transactions for the current fiscal year. (a) Issuance of the bonds.
(b) Second semiannual interest payment.
(c) Amortization of bond premium for the first year, using the straight-line method of amortization.