1. On January 1, 2013, a company issued and sold a $950,000, 7%, 10-year bond payable and received proceeds of $940,500. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:

Bond interest expense	33,725
Cash		33,250
Discount on bonds payable		475

Bond interest expense	33,250
Discount on bonds payable	475
Cash		33,725

Bond interest expense	33,250
Cash		33,250

Bond interest expense	66,500
Cash		66,500

Bond interest expense	32,775
Discount on bonds payable	475
Cash		33,250

2. On January 1, 2013, Jacob issued $600,000 of 11%, 15-year bonds at a price of 102