Question 1 - On the first day of the fiscal year, a company issues a $2,000,000, 12%, five-year bond that pays semiannual interest of $120,000 ($2,000,000 x 12% x1/2), receiving cash of $2,154,440. Journalize the bond issuance.
Cash - $2,154,440
Premium on Bonds payable - 154,440
Bonds Payable - 2,000,000
Question 2 - Using the bond from question 1, journalize the first interest payment and the amortization of the bond premium.