On January 1, a company issues bonds dated January 1 with a par value of $330,000. 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 10% and the bonds are sold for $317,254. The journal entry to record the issuance of the bond is:

Multiple Choice

• Debit Cash $317,254; debit Discount on Bonds Payable $12,746; credit Bonds Payable $330,000.

• Debit Cash $330,000; credit Discount on Bonds Payable $12,746; credit Bonds Payable $317,254.

• Debit Bonds Payable $330,000; debit Bond Interest Expense $12,746; credit Cash $342,746.

• Debit Cash $317,254; debit Premium on Bonds Payable $12,746; credit Bonds Payable $330,000.

• Debit Cash $317,254; credit Bonds Payable $317,254.