Luke Corp Issued $2,000,000 of 20-Year, 9% Callable Bonds on July

Multiple Choice

Luke Corp. issued $2,000,000 of 20-year, 9% callable bonds on July 1, Year 1, with interest payable on June 30 and December 31. The fiscal year of the company is the calendar year. What is the entry to record the payment of interest on December 31 in the year the bonds were issued?

A)
Interest Expense $\quad$ 180,000
Cash $\quad$ 180,000
B)
$\begin{array}{ll}\text { Interest Payable } & 90,000 \\\text { Interest Expense } & 90,000\\\text { Cash }&180,000\end{array}$
C)
Interest Expense $\quad$ 90,000
Cash $\quad$ 90,000

D)
Cash $\quad 90,000$
Interest Expense $\quad$ 90,000