On January 1, a company issues bonds dated January 1 with a par value of $390,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $405,830. The journal entry to record the first interest payment using straight-line amortization is: (Rounded to the nearest dollar.)

Multiple Choice

• Debit Bond Interest Expense $15,967; debit Discount on Bonds Payable $1,583; credit Cash $17,550.

• Debit Bond Interest Expense $15,967; debit Premium on Bonds Payable $1,583; credit Cash $17,550.

• Debit Bond Interest Expense $19,133; credit Discount on Bonds Payable $1,583; credit Cash $17,550.

• Debit Bond Interest Expense $19,133; credit Premium on Bonds Payable $1,583; credit Cash $17,550.