On January 1, a company issues bonds dated January 1 with a par value of $340,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December 31. The market rate is 12% and the bonds are sold for $327,490. The journal entry to record the first interest payment using straight-line amortization is:

Debit Interest Expense $19,951.00; credit Discount on Bonds Payable $1,251.00; credit Cash $18,700.00.

Debit Interest Expense $19,951.00; credit Premium on Bonds Payable $1,251.00; credit Cash $18,700.00.

Debit Interest Expense $18,700.00; credit Cash $18,700.00.

Debit Interest Payable $18,700.00; credit Cash $18,700.00.

Debit Interest Expense $17,449.00; debit Discount on Bonds Payable $1,251.00; credit Cash $18,700.00.

On January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $415,437. The journal entry to record the first interest payment using straight-line amortization is:

Debit Interest Payable $22,000.00; credit Cash $22,000.00.

Debit Bond Interest Expense $20,456.30; debit Premium on Bonds Payable $1,543.70; credit Cash $22,000.00.

Debit Bond Interest Expense $20,456.30; debit Discount on Bonds Payable $1,543.70; credit Cash $22,000.00.

Debit Bond Interest Expense $23,543.70; credit Discount on Bonds Payable $1,543.70; credit Cash $22,000.00.

Debit Bond Interest Expense $23,543.70; credit Premium on Bonds Payable $1,543.70; credit Cash $22,000.00.