On January 1 , a company issues bonds dated January 1 with a par value of $720,000. The bonds mature in 3 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31 . The bonds are sold for $705,000. The journal entry to record the first interest payment using straight-line amortization is: Multiple Choice Debit Bond Interest Expense $25,200; credit Premium on Bonds Payable $2,500; credit Cash $22,700. Debit Bond Interest Expense $25,200; credit Cash $25,200. Debit Interest Payable $25,200; credit Cash $25,200. Debit Bond Interest Expense $25,200; credit Premium on Bonds Payable $2,500; credit Cash $22,700. Debit Bond Interest Expense $25,200; credit Cash $25,200. Debit Interest Payable $25,200; credit Cash $25,200. Debit Bond Interest Expense $27,700; credit Discount on Bonds Payable \$2,500; credit Cash \$25,200. Debit Bond Interest Expense $22,700; debit Discount on Bonds Payable $2,500; credit Cash $25,200