Gridley Company issued $820,000, 8%, 10-year bonds on December 31, 2016, for $750,000. Interest is payable annually on December 31. Gridley Company uses the straight-line method to amortize bond premium or discount.

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2016	Cash	750,000
	Discount on Bonds Payable	70,000
	Bonds Payable		820,000

Prepare the journal entry to record the payment of interest and the discount amortization on December 31, 2017.

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2017	Interest Expensee
	Discount on Bonds Payable
	Cash