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Hawk issued $200,000 of its ten-year 10% bonds for $224,924 on October 1, 2016. The effective rate on the bonds was 8% and interest is

Hawk issued $200,000 of its ten-year 10% bonds for $224,924 on October 1, 2016. The effective rate on the bonds was 8% and interest is paid each October 1 and April 1. Refer to Exhibit 14-9. Assuming Hawk uses the effective interest method, the adjusting entry on December 31, 2016, would include

a. a credit to Premium on Bonds Payable for $502.

b. a credit to Interest Payable for $4,498.

c. a credit to Interest Payable for $5,000.

d. a debit to Interest Expense for $5,498

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