Question $11$

On January $1,2024,$ABC Company issues $$400,000$ of $7\%$ bonds, due in $20$ years, with interest payable semiannually on June $30$ and December $31$ each year. Assuming the market interest rate on the issue date is $7\%,$ the bonds will issue at $$400,000.$

The entry to record the semiannual interest payment on December $31,2024$ will include which of the following?

Debit to interest expense of $$14,000$

Credit to cash of $$28,000$

Debit to interest expense of $$28,000$

Debit to cash of $$14,000$