On January 1, a company issues bonds dated January 1 with a par value of $690,000. The bonds mature in 3 years. The contract rate is 6%, and interest is paid semiannually on June 30 and December 31. The bonds are sold for $681,000. The journal entry to record the first interest payment using straight-line amortization is: Debit Interest Expense $19,200; debit Discount on Bonds Payable $1,500; credit Cash $20,700. Debit Interest Expense $22,200; credit Discount on Bonds Payable $1,500; credit Cash $20,700. Debit Interest Expense $20,700; credit Cash $20,700. Debit Interest Expense $20,700; credit Premium on Bonds Payable $1,500; credit Cash $19,200. Debit Interest Payable $20,700; credit Cash $20,700. Merchant Company purchased property for a building site. The costs associated with the property were: Purchase price Real estate commissions Legal fees Expenses of clearing the land Expenses to remove old building $ 194,000 16,900 2,700 3,900 2,900 What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building? Multiple Choice $220,400 to Land: $0 to Building. $196,700 to Land: $26,400 to Building. $213,600 to Land: $2,900 to Building. $217,500 to Land: $0 to Building. $210,900 to Land: $9,500 to Building. Mohr Company purchases a machine at the beginning of the year at a cost of $42,000. The machine is depreciated using the straight-line method. The machine's useful life is estimated to be 8 years with a $4,000 salvage value. Depreciation expense in year 2 is: Multiple Choice $38,000. $10,500. $5,250. $0. $4,750