On January 1, Hurley Corporation issues $500,000, 5-year, 12% bonds at 96 with interest payable on July

Question:

On January 1, Hurley Corporation issues $500,000, 5-year, 12% bonds at 96 with interest payable on July 1 and January 1. The entry on July 1 to record payment of bond interest and the amortization of bond discount using the straight-line method will include a:

(a) debit to Interest Expense $30,000.

(b) debit to Interest Expense $60,000.

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