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A company issues $500,000 of 8%, 10-year bonds dated on January 1, 2004, that mature on December 31, 2013, and pay interest semiannually on each

A company issues $500,000 of 8%, 10-year bonds dated on January 1, 2004, that mature on December 31, 2013, and pay interest semiannually on each June 30 and December 31. What entry should be made on December 31, 2004?

Debit Bond Interest Expense $40,000; Credit Bond Interest Payable $40,000

Debit Bond Interest Expense $40,000; Credit Cash $40,000

Debit Bond Interest Expense $20,000; Credit Bond Interest Payable $20,000

Debit Bond Interest Expense $20,000; Credit Cash $20,000

None of the above

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