On January 1, 20x8, Charles Corporation issued $500,000, 10%, 5-year bonds, at 98. The bonds pay semiannual interest on January 1 and July 1. The company uses the straight-line method of amortization and has a calendar year end.

The journal entry on July 1, 20x8 would include which of the following?

Select one:

a. Debit to Bond Interest Expense for $26,000

b. Debit to Bond Interest Expense for $25,000

c. Credit to cash for $26,000

d. None of the above