Item$1$

Time Remaining $59$ minutes $12$ seconds$00$:$59$:$12$

Item $1$

Time Remaining $59$ minutes $12$ seconds$00$:$59$:$12$

On January $1,$ a company issues bonds dated January $1$ with a par value of $$390,000.$ The bonds mature in $5$ years. The contract rate is $9\%,$ and interest is paid semiannually on June $30$ and December $31.$ The market rate is $8\%$ and the bonds are sold for $$405,830.$ The journal entry to record the first interest payment using the effective interest method of amortization is: $($Rounded to the nearest dollar.$)$

Multiple Choice

Debit Bond Interest Expense $19,133$; credit Premium on Bonds Payable $$1,583$; credit Cash $$17,550.$

Debit Interest Payable $$17,550$; credit Cash $$17,550.$

Debit Bond Interest Expense $$16,233$; debit Discount on Bonds Payable $$1,317$; credit Cash $$17,550.$

Debit Bond Interest Expense $$16,233$; debit Premium on Bonds Payable $$1,317$; credit Cash $$17,550.$

Debit Bond Interest Expense $$15,967$; debit Premium on Bonds Payable $$1,583$; credit Cash $$17,550.$