Evermaster Corporation issued $100,000 of 8% term bonds on January 1, 2014, due on January 1, 2019, with interest payable each July 1 and January 1. Investors require an effective-interest rate of 12%. Record the journal entry of issuance at January 1, 2014 and the journal entry of first interest payment at July 1, 2014.

PV of $1 (n=10, i=6%) factor=0.55839

PV of ordinary annuity (n=10,i=6%) factor=7.36009

Which of the following statement is correct?

	A.	To record the journal entry of interest expense on 7/1/2014 Interest expense 5,117 Discount on bond payable 1,117 Cash 4,000
	B.	To record the journal entry of interest expense on 7/1/2014 Interest expense 10,234 Discount on bond payable 6,234 Cash 4,000
	C.	To record the journal entry of interest expense on 7/1/2014 Interest expense 2,883 Discount on bond payable 1,117 Cash 4,000
	D.	To record the journal entry of interest expense on 7/1/2014 Interest expense 5,117 Premium on bond payable 1,117 Cash 4,000