On January a company issues bonds dated January with a par value of $ The bonds mature in years. The contract rate is and interest is paid semiannually on June and December The market rate is and the bonds are sold for $ The journal entry to record the first interest payment using the effective interest method of amortization is:
Multiple Choice
Debit Interest Expense $; credit Premium on Bonds Payable $; credit Cash $
Debit Interest Expense $; debit Discount on Bonds Payable $; credit Cash $
Debit Interest Payable $; credit Cash $
Debit Interest Expense $; credit Discount on Bonds Payable $; credit Cash $
Debit Interest Expense $; debit Premium on Bonds Payable $; credit Cash $
