A company issued a 5 year, 7% B/P with a face value of $300,000 at 103 when the market rate if 6%. Interest payments are made semiannually. Using the effective interest method, what would be the journal entry for the first payment?

	a.	debit interest expense $10,500, debit bond premium $1,230; credit cash $11,730
	b.	debit interest expense $10,500; credit bond discount $1,230, credit cash $9,270
	c.	debit interest expense $9,270, debit bond premium $1,230; credit cash $10,500
	d.	debit interest expense $9,270, debit bond discount $1,230; credit cash $10,500

A company issued a 5 year, 7% B/P with a face value of $300,000 at 103 when the market rate if 6%. Interest payments are made semiannually. Using the straight-line method, what would be the journal entry for the first payment?

	a.	debit interest expense $9,600, debit bond discount $900; credit cash $10,500
	b.	debit interest expense $9,600, debit bond premium $900; credit cash $10,500
	c.	debit interest expense $10,500; credit bond discount $900, credit cash $9,600
	d.	debit interest expense $10,500; credit bond premium $900, credit cash $9,600