On July 1, 2016, Cargo Corporation issues $4,000,000 of 10-year bonds dated July 1, 2016, at 100 1/2 when the market rate of interest was 8%. Cargo Corporation uses the effective-interest method of amortization. Interest is paid each June 30 and December 31. The entry to record the first semi-annual interest payment on December 31, 2016, will include a: a) credit to Interest Payable for $160,000 b) debit to Interest Expense for $160,800 c) debit to Premium on Bonds Payable for $321,600 d) credit to Premium on Bonds Payable for $320,000