On 1/1/Y1 Copa Corporation purchased a $500,000 bond with a stated interest rate of 7%. What journal entry would Copa record for the collection of semi-annual interest on 6/30/Y1?

Select one:

a.

DR: Interest Income $35,000; CR: Cash $35,000

b.

DR: Cash $35,000; CR: Interest Income $35,000

c.

DR: Cash $17,500; CR: Interest Income $17,500

d.

DR: Interest Income $17,500; CR: Cash $17,500

Clear my choice