On January 1, 2014, Powell Corporation issued $600,000, 5%, 5-year bonds dated January 1, 2014, at 95. The bonds pay annual interest on January 1. The company uses the straight-line method of amortization and has a calendar year end. Prepare all the journal entries that Powell Corporation would make related to this bond issue through January 1, 2015. Be sure to indicate the date on which the entries would be made

Date Account Titles and Explanation Debit Credit January 1, 2014 To record sale of bonds at a discount) December 31, 2014 To record annual accrued bond interest and amortization of bond discount) January 1, 2015 To record payment of bond interest liability)