Question 17 (2 points) On January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $383,793. The journal entry to record the first interest payment using the effective interest method of amortization is: Debit Interest Expense $12,648.28; debit Premium on Bonds Payable $1,351.72; credit Cash $14,000.00. Debit Interest Payable $14,000.00; credit Cash $14,000.00. Debit Interest Expense $12,648.28; debit Discount on Bonds Payable $1,351.72 credit Cash $14,000.00. Debit Interest Expense $15,351.72; credit Discount on Bonds Payable $1,351.72 credit Cash $14,000.00. Debit Interest Expense $15,351.72; credit Premium on Bonds Payable $1,351.72; credit Cash $14,000.00