Lorien Company issued bonds with a coupon rate of 0% and a face amount of $100,000. These are zero-coupon bonds. The bonds mature in 20 years. The market interest rate for bonds with the same degree of riskiness is 7% compounded annually. These bonds were issued on January 1 of Year 1. Lorien uses theeffective-interest methodon its books. Note: Round all your calculations to the nearest dollar. In the journal entry made in connection with these bonds onDecember 31 of Year 1, there is a

DEBIT to Interest Expense of $7,000.

DEBIT to Discount on Bonds of $1,809.

CREDIT to Discount on Bonds of $1,809.

CREDIT to Interest Payable of $3,708.

DEBIT to Interest Expense of $5,191.

CREDIT to Discount on Bonds of $2,584.

CREDIT to Interest Payable of $1,809.

nothing; no journal entry is needed on December 31 of Year 1.