On January 1, Twister Enterprises issues $540,000 of 6% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 7%. National Hydraulics, a supplier of mechanical parts to Twister Enterprises, purchases 25% of the bond issue ($135,000 face amount) at a discount for $120,585.

3. Record the sale of the bonds by National Hydraulics on December 31, for $135,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations to the nearest whole dollar.)