Minnow Corporation issued $600,000 of 10 percent, five-year
bonds. Because the market rate for similar investments was 11 percent, the
bonds had to be issued at a discount. The discount on the issuance of the bonds
was $24,335. The company’s fiscal year ends February 28. Prepare the journal
entries to record the bond issue on March 1, 2014, the payment of interest, and
the amortization of the discount on August 31, 2014 and on February 28, 2015.
Use the effective interest method.