On January $1,$ a company issues bonds dated January $1$ with a par value of $$430,000.$ The bonds mature in $5$ years. The contract rate is $7\%,$ and interest is paid semiannually on June $30$ and December $31.$ The market rate is $8\%$ and the bonds are sold for $$412,577.$ The journal entry to record the first interest payment using the effective interest method of amortization is:

Multiple Choice

Debit Interest Expense $$16,503$; credit Premium on Bonds Payable $$1,453$; credit Cash $$15,050.$

Debit Interest Expense $$13,597$; debit Discount on Bonds Payable $$1,453$; credit Cash $$15,050.$

Debit Interest Payable $$15,050$; credit Cash $$15,050.$

Debit Interest Expense $$16,503$; credit Discount on Bonds Payable $$1,453$; credit Cash $$15,050.$

Debit Interest Expense $$13,597$; debit Premium on Bonds Payable $$1,453$; credit Cash $$15,050.$