a. Day Company sells $400,000 of 5%, 10-year bonds for 97 on January 1, 2014. The market rate of interest on that day is 5.5%. Interest is paid annually. 5. The entry to record the bond issuance on January 1 would include: a debit to Cash for $388,000 and a credit to Bonds Payable for $388,000 b. a debit to Cash for $400,000, a credit to Discount on Bonds Payable for $12,000 and a credit to Bonds Payable for $388,000 c. a debit to Cash for $388,000, a debit to Discount on Bonds Payable for $12,000 and a credit to Bonds Payable for $400,000 d. a debit to Cash for $400,000 and a credit to Bonds Payable for $400,000 6. The amount of annual interest expense each year will be: a. $21,200 b. $20,000 c. $10,600 mono d. $23,200 bonobod