On August 31, Latty Co. partially refunded $495,000 of its outstanding 10% note payable made one year ago to Dugan State Bank by paying $495,000 plus $49,500 interest, having obtained the $544,500 by using $139,550 cash and signing a new one-year $445,000 note discounted at 9% by the bank. Make the entry to record the partial refunding. Assume Latty Co. makes reversing entries when appropriate. Prepare the adjusting entry at December 31, assuming straight-line amortization of the discount.