Please explain how you can tell from this question it is a debit to Discount on bonds payable and not a Premium on bonds payable. I am very confused on how you can tell it is a discount just by the question that is asked. Can you also provide an example of this question would be worded if it was a premium on bonds payable instead?

The journal entry to record $400,000 of bonds that were issued at 107 would be to: debit Cash, $428,000; credit Bonds payable, $428,000. debit Cash, $428,000; credit Bonds payable, $400,000; credit Premium on bonds payable, $28,000. debit Cash, $400,000; debit Discount on bonds payable, $28,000; credit Bonds payable, $428,000. debit Cash, $400,000; credit Bonds payable, $400,000