Warner Company Issued $5,000,000 of 6%, 10-Year Bonds on One

Multiple Choice

Warner Company issued $5,000,000 of 6%, 10-year bonds on one of its interest dates for $4,318,500 to yield an effective annual rate of 8%.The effective-interest method of amortization is to be used.The journal entry on the first interest payment date, to record the payment of interest and amortization of discount will include a

A) debit to Bond Interest Expense for $300,000.
B) credit to Cash for $345,481.
C) credit to Discount on Bonds Payable for $45,480.
D) debit to Bond Interest Expense for $400,000.