3. On 1 July 2014, Izquierdo Ltd issued a 1 million corporate bond in 5-year debentures that pay interest each 6 months at an annual coupon rate of 8%. At the time of issuing the securities, the market required an annual rate of return of 6%. Interest expense is determined using the effective-interest method. The journal entry regarding the interest expense and debenture liability on 1 July 2015 looks as follows: a) Dr Cash Cr Debentures b) Dr Interest Expense Dr Debentures Cr Cash 1,070,203 1,070,203 32,336 7,664 40,000 c) Dr Interest Expense Dr Debentures 33,767 6,233 Cr Cash 40,000 d) Dr Interest Expense Cr Debentures 40,000 7,441 Cr Cash 47,441