On January 1, a company issues bonds dated January 1 with a par value of $380,000. The bonds mature in…

On January 1, a company issues bonds dated January 1 with a par value of $380,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $364,603. The journal entry to record the first interest payment using straight-line amortization is: Debit Interest Payable $13,300.00; credit Cash $13,300.00. Debit Interest Expense $14,839.70; credit Discount on Bonds Payable $1,539.70; credit Cash $13,300.00. Debit Interest Expense $13,300.00; credit Cash $13,300.00. Debit Interest Expense $11,760.30; debit Discount on Bonds Payable $1,539.70; credit Cash $13,300.00. Debit Interest Expense $14,839.70; credit Premium on Bonds Payable $1,539.70; credit Cash $13,300.00.