MC Qu. 155 On January 1, a company issues...

On January 1, a company issues bonds dated January 1 with a par value of $360,000. 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 10% and the bonds are sold for $346,096. The journal entry to record the first interest payment using straight-line amortization is:

Multiple Choice Debit Interest Expense $16,200.00; credit Cash $16,200.00 Debit Interest Expense $17,590.40; credit Discount on Bonds Payable $1,390.40; credit Cash $16,200.00 Debit Interest Expense $14,809.60; debit Discount on Bonds Payable $1,390.40; credit Cash $16,200.00 Debit Interest Expense $17,590.40; credit Premium on Bonds Payable $1,390.40; credit Cash $16,200.00 Debit Interest Payable $16,200.00; credit Cash $16,200.00