Candlestick, Inc. issues $5,000,000 face value bonds, on January 1, 2020. The bonds are to mature exactly in 5 years' time. The stated interest rate on the bonds is 6%, and interest is paid annually on December 31 of every year. The market interest rate is 8%. Accordingly, the carrying value of the bonds payable on January 1\1\2020 is $4,600,810. The company uses the effective interest method for amortization purposes.

On December 31\12\2020, the journal entry includes:

a. a debit to cash 300,000

O b. a debit to interest expense 368,065

C. none of the available choices.

d. a debit to discount on bonds

payable 68,065