On January 1, a company issued and sold a $398,000, 6%, 10-year bond payable, and received proceeds of $393,000. 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:

Multiple Choice

• Debit Bond Interest Expense $11,690; debit Discount on Bonds Payable $250; credit Cash $11,940.

• Debit Bond Interest Expense $12,190; credit Cash $11,940; credit Discount on Bonds Payable $250.

• Debit Bond Interest Expense $23,880; credit Cash $23,880.

• Debit Bond Interest Expense $11,940; credit Cash $11,940.

• Debit Bond Interest Expense $11,940; debit Discount on Bonds Payable $250; credit Cash $12,190.