MC Qu. 150 On January 1, a company issues...

On January 1, a company issues bonds dated January 1 with a par value of $290,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 6% and the bonds are sold for $302,371. The journal entry to record the first interest payment using straight-line amortization is: (Rounded to the nearest dollar.)

Multiple Choice Debit Interest Payable $10,150; credit Cash $10,150. Debit Bond Interest Expense $11,387; credit Premium on Bonds Payable $1,237; credit Cash $10,150. Debit Bond Interest Expense $8,913; debit Premium on Bonds Payable $1,237; credit Cash $10,150 Debit Bond Interest Expense $8,913; debit Discount on Bonds Payable $1,237; credit Cash $10,150 Debit Bond Interest Expense $11,387; credit Discount on Bonds Payable $1,237; credit Cash $10,150