On December 30, Year 4, Fort, Inc., issued 1,000 of its 8%, 10-year, $1,000 face value bonds with detachable stock warrants at par. Each bond carried a detachable warrant for one share of Forts common stock at a specified option price of $25.75 per share. Immediately after issuance, the market value of the bonds without the warrants was $1,080,000, and the market value of the warrants was $120,000. In its December 31, Year 4, balance sheet, what amount should Fort report as bonds payable?

Prepare the journal entry to record the issuance of the bond assuming that the warrants are detachable using the proportional method. Please provide step by step instructions. Thank you.