Orange Corp. is in need of cash. It issues bonds with a $500,000 face value. The bonds have a 5% coupon rate. The market rate is 5%. The bonds have a life of 5 years, and are compounded semiannually. Orange Corp. issues the bonds on 1/1/2022.

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What is the journal entry at Orange Corp. will record on 12/31/22?

Question 3 options:

	N/A - No entry is required
	Dr. Interest Expense $25,000 Cr. Cash $25,000
	Dr. Interest Expense $12,500 Cr. Cash $12,500
	Dr. Interest Revenue $12,500 Cr. Cash $12,500