On January 1, a company issued and sold a $395,000, 8%, 10-year bond payable, and received proceeds of $390,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:

	Debit Bond Interest Expense $15,800; credit Cash $15,800.
	Debit Bond Interest Expense $16,050; credit Cash $15,800; credit Discount on Bonds Payable $250.
	Debit Bond Interest Expense $15,550; debit Discount on Bonds Payable $250; credit Cash $15,800.
	Debit Bond Interest Expense $15,800; debit Discount on Bonds Payable $250; credit Cash $16,050.
	Debit Bond Interest Expense $31,600; credit Cash $31,600.