On January 1, Panda Express issued bonds payable with a par value of $400,000 due in 10 years and paying interest at a contract rate of 7%. The bonds pay interest semiannually on June 30 and December 31. The average market rate for bonds with similar risk was 7.5%, so the sale price of the bond was $396,000. Panda Express uses the straight-line method to amortize any premium or discount. The journal entry to record the first interest payment would be: