On January 1, 2017, Powell Corporation issued $600,000, 5%, 5-year bonds dated January 1, 2017, at 95. The bonds pay annual interest on January 1. The company uses the effective interest method of amortization and has a calendar year end. The market interest rate is 6%. Prepare all the journal entries that Powell Corporation would make related to this bond issue through January 1, 2018. Be sure to indicate the date on which the entries would be made.

January 1, 2017:

dr. cash $570,000

dr. discounts on bonds payable $30,000

cr. Bonds payable $600,000

December 31, 2017:

January 1, 2018: