On January $1,$ a company issues bonds dated January $1$ with a par value of $$400,000.$ The bonds mature in $5$ years. The contract rate is $7\%,$ and interest is paid semiannually on June $30$ and December $31.$ The market rate is $8\%$ and the bonds are sold for $$383,793.$ The journal entry to record the first interest payment using straight$-$line amortization is:

Multiple Choice

Debit Interest Payable $$14,000\mathrm{.}00$; credit Cash $$14,000\mathrm{.}00.$

Debit Interest Expense $$14,000\mathrm{.}00$; credit Cash $$14,000\mathrm{.}00.$

Debit Interest Expense $$15,620\mathrm{.}70$; credit Discount on Bonds Payable $$1,620\mathrm{.}70$; credit Cash $$14,000\mathrm{.}00.$

Debit Interest Expense $$12,379\mathrm{.}30$; debit Discount on Bonds Payable $$1,620\mathrm{.}70$; credit Cash $$14,000\mathrm{.}00.$

Debit Interest Expense $$15,620\mathrm{.}70$; credit Premium on Bonds Payable $$1,620\mathrm{.}70$; credit Cash $$14,000\mathrm{.}00.$