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 Orange Corp. will record when it retires the bonds in 5 years (after/not including the final coupon payment):

Question 4 options:

	Dr. Bonds Payable $500,000 Cr. Cash $500,000
	Dr. Bonds Payable $500,000 Cr. Interest Revenue $500,000
	Dr. Interest Expense $500,000 Cr. Cash $500,000
	Dr. Cash $500,000 Cr. Bonds Payable $500,000