Answer:
January 1, 202x, bonds issued at a discount
Dr Cash 441,361
Dr Discount on bonds payable 18,639
Cr Bonds payable 460,000
amortization of bond discount = ($441,361 x 4%) - ($460,000 x 3.5%) = $17,654.44 - $16,100 = $1,554.44
June 20, 202x, first coupon payment
Dr Interest expense 17,654.44
Cr Cash 16,100
Cr Discount on bonds payable 1,554.44
