On January 1, a company issued and sold a $406,000, 7%, 10-year bond payable, and received proceeds of $401,000. 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:

a. Debit Bond Interest Expense $13,960; debit Discount on Bonds Payable $250; credit Cash $14,210.

b. Debit Bond Interest Expense $14,210; debit Discount on Bonds Payable $250; credit Cash $14,460.

c. Debit Bond Interest Expense $14,210; credit Cash $14,210.

d. Debit Bond Interest Expense $28,420; credit Cash $28,420.

e. Debit Bond Interest Expense $14,460; credit Cash $14,210; credit Discount on Bonds Payable $250.

Please show the work used to find answer.