On January 1, 2018, Smith Corporation issued bonds with a face value of $1,000,000. The bonds have a coupon interest rate of 5%, payable each July 1 and January 1. Instructions:

(a) Prepare the journal entry for the issue, assuming the bonds are issued at 98.5.

(b) Prepare the journal entry for the issue, assuming the bonds are issued at 104.5.