On January 1, 2018, the date of bond authorization, Paquette Inc. issued 3-year, 12-per cent bonds. Semi-annual

Question:

On January 1, 2018, the date of bond authorization, Paquette Inc. issued 3-year, 12-per cent bonds. Semi-annual interest is payable on June 30 and December 31. Paquette uses the straight-line method of amortization. The following journal entry records the first payment of interest:
2018
June 30 Interest Expense
Cash
Discount on Bonds
17,000
16,500
500
Required: Reconstruct the journal entry made to record the issuance of bonds on January 1, 2018.