Blandings Glassware Company issues $1,000,000 of 8%,10-year bonds at 98 on February 28,2014.The bonds pay interest on February 28 and August 31.Assume that Blandings uses the straight-line method for amortization.The journal entry to record the first interest payment on August 31,2014 would be a ________.

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The interest expense is calculated as the cash interest payment plus the amortization of the bond discount. The cash interest payment is $40,000 ($1,000,000 x 8% x 6/12), and the discount amortization is $1,000 ($20,000 discount / 20 periods). Therefore, the total interest expense is $41,000.

Blandings Glassware Company Issues $1,000,000 of 8%,10-Year Bonds at 98