QUESTION 5 On January 1 20X1, Jude Company issues bonds with a face value of $2,000,000 in exchange for cash. On that date the market rate is 12%. The bond has a stated rate of 15% and matures in five years. Interest is paid every four months. Which of the following is part of the journal entry that Jude Company records at the date of the bond issuance.

DEBIT to Bond Payable for $2,000,000

DEBIT to Cash for $2,000,000

CREDIT to Premium on Bond Payable for $215,500