Suppose a company issues $500,000 of 4% bonds, due in 5 years, with interest payable semiannually. The bonds are issued at face amount. What would the company record at the time of issuance?

Multiple Choice

Debit Cash $500,000; debit Interest Expense $100,000; credit Bonds Payable $500,000; credit Interest Payable $100,000.

Debit Cash $400,000; debit Interest Expense $100,000; credit Bonds Payable $500,000.

Debit Cash $500,000; credit Bonds Payable $500,000.

Debit Cash $500,000; credit Bonds Payable $400,000; credit Interest Payable $100,000.