On January 1,2010,Jacob Issues $800,000 of 9%,13-Year Bonds at a Price

Multiple Choice

On January 1,2010,Jacob issues $800,000 of 9%,13-year bonds at a price of 96½.Six years later,on January 1,2016,Jacob retires 20% of these bonds by buying them on the open market at 105½.All interest is accounted for and paid through December 31,2015,the day before the purchase.The straight-line method is used to amortize any bond discount or premium. What is the journal entry to record the issuance of the bonds on January 1,2010?

A)
$$\begin{array} { | l | r | r | } \hline \text { Cash } & \mathbf { 8 0 0 , 0 0 0 } & \\\hline \text { Bonds Payable } & & \mathbf { 8 0 0 , 0 0 0 } \\\hline\end{array}$$
B)
$$\begin{array} { | c | r | r | } \hline \text { Bonds Payable } & \mathbf { 8 0 0 , 0 0 0 } & \\\hline \text { Cash } & & \mathbf { 8 0 0 , 0 0 0 } \\\hline\end{array}$$
C)
$$\begin{array} { | l | r | r | } \hline \text { Cash } & \mathbf { 8 0 0 , 0 0 0 } & \\\hline \text { Bonds Payable } & & 772,000 \\\hline \text { Discount on Bonds Payable } & & \mathbf { 2 8 , 0 0 0 } \\\hline\end{array}$$
D)
$$\begin{array} { | l | r | r | } \hline \text { Cash } & 772,000 & \\\hline \text { Premium on Bonds Payable } & 28,000 & \\\hline \text { Bonds Payable } & & 8 0 0 , 000 \\\hline\end{array}$$
E)
$$\begin{array} { | l | r | r | } \hline \text { Cash } & 772,000 & \\\hline \text { Discount on Bonds Payable } & 28,000 & \\\hline \text { Bonds Payable } & &8 0 0, 000 \\\hline\end{array}$$