E14-5B (Entries for Bond Transactions—Effective Interest) Assume the same information as in E14-4B, except that McGee Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 6% in pricing the b

E14-5B (Entries for Bond Transactions—Effective Interest) Assume the same information as in E14-4B, except that McGee Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 6% in pricing the bond.

Instructions

Prepare the journal entries to record the following. (Round to the nearest dollar.)

(a) The issuance of the bonds.

(b) The payment of interest and related amortization on July 1, 2014.

(c) The accrual of interest and the related amortization on December 31, 2014.