Joseph Company had underwriters prepare a bond issue for $100,000 9%, ten-year bonds dated January 1, 2014.

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Question:

Joseph Company had underwriters prepare a bond issue for $100,000 9%, ten-year bonds dated January 1, 2014. The bonds were issued on March 1, 2014 at 102 plus accrued interest on. Expenses connected with the issue totaled $5,000 and were deducted in arriving at the net proceeds. Joseph amortizes premiums and discounts using the straight-line method. The entry to record the issue would include

a) A debit to Bonds Payable for $100,000.

b) A debit to Interest Expense for $1,500.

c) A credit to Interest Expense for $1,500

d) A credit to Bonds Payable for $102,000.