On 1/1/2015 Gladrags Company issued a 8-year bond payable with a face value of $100,000 and an annual stated interest rate of 7%. Interest payments are made semi-annually on each June 30 and December 31, starting 6/30/2015. The market interest rate on similar bonds is 5%. Round all calculations to the nearest dollar.

1. On 1/1/2015, Gladrags will record a credit to Premium on bond payable in the amount of