On January 1 of 2015, Parson Freight Company issues 9.0%, 10-year bonds with a par value of $3,900,000. The bonds pay interest semi-annually. The market rate of interest is 10.0% and the bond selling price was $3,634,992. The bond issuance should be recorded as:

Multiple Choice

• Debit Cash $3,634,992; debit Interest Expense $265,008; credit Bonds Payable $3,900,000.

• Debit Cash $3,634,992; credit Bonds Payable $3,634,992.

• Debit Cash $3,900,000; credit Bonds Payable $3,634,992; credit Discount on Bonds Payable $265,008.

• Debit Cash $3,634,992; debit Discount on Bonds Payable $265,008; credit Bonds Payable $3,900,000.

• Debit Cash $3,900,000; credit Bonds Payable $3,900,000.