A Company Sells a Bond with a Face Value of $10,000

Multiple Choice

A company sells a bond with a face value of $10,000 and receives a premium of $800. Using Bonds Payable, net (shortcut method) , the company would make the following journal entry:

A) Debit Cash for $10,800 and credit Bonds Payable, net for $10,800.
B) Debit Cash for $10,800, credit Bonds Payable, net for $10,000, and credit Premium on Bond Payable for $800.
C) Debit Cash for $10,000, debit Interest Expense for $800, credit Bonds Payable, net for $10,000, and credit Premium on Bonds Payable for $800.
D) Debit Cash for $10,000, debit Interest Expense for $800, credit Bonds Payable for $10,000 and credit