On January 1, 2020, Mayor Company issued 40,000 5-year bonds with a $1,000 par value each. The market values the bonds at $30,000 less than the face value of the bonds. The stated rate of interest is 6%, and interest is paid annually on December 31.
Required:
Prepare the necessary journal entry on December 31, 2020, assuming the straight-line method is followed.