On January 1, 2017, Benson Company Purchases $120,000 , 6

Multiple Choice

On January 1, 2017, Benson Company purchases $120,000 , 6% bonds at a price of 93 and a maturity date of January 1, 2022. Benson Company plans to hold the bonds until their maturity date. Interest is paid semiannually, on January 1 and July 1. Benson Company has a calendar year and uses the straight-line amortization method for discounts and premiums. The adjusting entry on December 31, 2017 is:

A) debit Cash $840 and credit Interest Revenue $840.
B) debit Cash $7200 and credit Interest Revenue $7200.
C) debit to Interest Receivable $3600, debit Held-to-Maturity Investment in Bonds for $840 and credit Interest Revenue $4440.
D) debit to Interest Receivable $7200 and credit Interest Revenue $7200.