QUESTION 8

1. On October 1, 2016 MK Corporation issues a bond for $110,000 cash. The bond has a face value of $100,000. Interest is paid quarterly. On January 1, 2017 the company records the following entry for the first contract interest payment:

   Interest expense	5,500
   Premium	500
   Cash		6,000
   (to record interest expense)

   Which of the following would be included in the journal entry to record the next contract interest payment which the company pays in cash on April 1, 2017?

   		DEBIT to Interest Expense for $5,500
   		DEBIT to Interest Expense for $5,425
   		DEBIT to Interest Expense for $5,475
   		DEBIT to Interest Expense for $5,225
   		DEBIT to Interest Expense for $5,525
   		DEBIT to Interest Expense for $5,000