6. Dillon Corp. issued $200,000 of 6% (cash payable each December 31), 10-year bonds on January 1, 2020. The bonds are callable at any point after 2022 at 103. The bonds sold on January 1, 2020, at 97 resulting in a market rate of 6.42%. Effective Interest Method amortization of bond discounts and premiums is used. Due to a drop in interest rates, Dillon decided to call in half of the bonds and issue a new series of bonds in the amount of $100,000 (5% cash interest annually, five-year term) on January 1, 2025, at par. At the time of the exchange, there was $3930 left to discount on Bonds Payable left to amortize.

Required

Group of answer choices

a) Debit Bond Payable $200,000 credit Cash $200,000

b) Debit Bond Payable $100,000 credit Discount on Bond Payable $3,930

c) Debit Loss on redemption of Bond Payable $4,965 credit Cash $103,000

d) Debit Bond Payable $100,000 credit Premium on Bond Payable $1965