Pelican Co. issued 6%, 4-year, $500,000 bonds at 96 on July 1, 2021, with semi-annual interest paid January 1 & July 1. What effect does the entry on bond issuance have on Pelican's assets and liabilities?

1), Assets Increase by $480,000 and Liabilities Increase by 500,000

2). Assets Increase by $500,000 and Liabilities Increase by $480,000

3). Assets Increase by $500,000 and Liabilities Increase by $500,000

4). Assets Increase by $480,000 and Liabilities Increase by $480,000