On January 1 of this year, Cunningham Corporation issued bonds with a face value of $200,000 and a coupon rate of 6 percent. The bonds mature in 10 years and pay interest annually every December 31. The total issue price of the bonds is $173,160. The company uses the effective-interest amortization method. Prepare all journal entries under this bond arrangement for the first year. In the journal entries, put bond discounts in separate accounts.

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