On January 1, 2020, Milwaukee Corporation issued $3,000,000 of its 20-

year, 8% bonds payable at 96. Interest is payable annually on January1.

The entry when the bond was issued would include a

1. credit to bonds payable for $2,880,000.

2. debit to interest expense for $120,000.

3. debit to discount on bonds payable for $120,000.

4. credit to premium on bonds payable for $120,000