Solderman Company issued$460,000, 8%, 10year bonds for$442,800 with a market rate of10%. The effectiveinterest method of amortization is to be used and interest is paid annually. The journal entry on the first interest payment date would includea:

A.

credit to Interest Expense of$7480.

B.

credit to Cash of$44,280.

C.

credit to Interest Expense of$36,800.

D.

credit to Discount on Bonds Payable of$7480.