On January 1, a company issues bonds dated January 1 with a par value of $210,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $218,105. The journal entry to record the issuance of the bond is:

Multiple Choice

a. Debit Bonds Payable $210,000; debit Bond Interest Expense $8,105; credit Cash $218,105.

b. Debit Cash $210,000; debit Premium on Bonds Payable $8,105; credit Bonds Payable $218,105.

c. Debit Cash $218,105; credit Premium on Bonds Payable $8,105; credit Bonds Payable $210,000.

d. Debit Cash $218,105; credit Bonds Payable $218,105.

e. Debit Cash $218,105; credit Discount on Bonds Payable $8,105; credit Bonds Payable $210,000.