Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $4,100,000 of 7-year, 9% bonds at a market (effective) interest rate of 7%, receiving cash of $4,547,740. Interest is payable semiannually on April 1 and October 1.

a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank.

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The market rate of interest is the contract rate of interest.