On February 1, 2016, Strauss-Lombardi issued 8% bonds, dated February 1, with a face amount of $600,000. The bonds sold for $544,796 and mature on January 31, 2036 (20 years). The market yield for bonds of similar risk and maturity was 9%. Interest is paid semiannually on July 31 and January 31. Strauss-Lombardi’s fiscal year ends December 31.
Prepare the journal entry to record their issuance by Strauss-Lombardi on February 1, 2016, interest on July 31, 2016 (at the effective rate), adjusting entry to accrue interest on December 31, 2016 and interest on January 31, 2017. (Do not round your intermediate calculations and round your final answer to nearest whole dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)