On the first day of the fiscal year, a company issues an $535,000, 7%, five-year bond that pays semiannual interest of $18,725 ($535,000 x 7% x 1/2), receiving cash of $502,900. Journalize the entry to record the first interest payment and the amortization of the related bond discount using the straight-line method. If an amount box does not require an entry, leave it blank. Cash Discount on Bonds Payable Bonds Payable