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On January 1, a company issued and sold a $403,200, 9%, 10-year bond payable, and received proceeds of $398,000. Interest is payable each June 30

On January 1, a company issued and sold a $403,200, 9%, 10-year bond payable, and received proceeds of $398,000. 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 $18,144; debit Discount on Bonds Payable $260; credit Cash $18,404.

Debit Bond Interest Expense $36,288; credit Cash $36,288.

Debit Bond Interest Expense $18,404; credit Cash $18,144; credit Discount on Bonds Payable $260.

Debit Bond Interest Expense $17,884; debit Discount on Bonds Payable $260; credit Cash $18,144.

Debit Bond Interest Expense $18,144; credit Cash $18,144.

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