On January 1,2010,Lane issues $700,000 of 7%,15-year bonds at a price of 106 3/4.The interest payments are made on June 30 and December 31.Lane elects a fiscal year ending September 30.What is the appropriate adjusting journal entry required for September 30,2010?
A)

\begin{array}{|c|r|r|}\hline \text { Interest Expense } & 22,925 & \\\hline \text { Cash } & & 22,925 \\\hline\end{array}

\begin{array} { | l | r | r | } \hline \text { Interest Expense } & 22,925 & \\\hline \text { Premium on Bonds Payable } & 1,575 & \\\hline \text { Cash } & & 24,500 \\\hline\end{array}

\begin{array} { | l| r | r | } \hline \text { Interest Expense } & 11,462 & \\\hline \text { Premium on Bonds Payable } & 788 & \\\hline \text { Interest Payable } & & 12,250 \\\hline\end{array}

\begin{array} { | l | r | r | } \hline \text { Interest Payable } & 11,462 & \\\hline \text { Premium on Bonds Payable } & 788 & \\\hline \text { Cash } & & 12,250 \\\hline\end{array}

\begin{array} { | l | r | r | } \hline \text { Interest Payable } & 11,462 & \\\hline \text { Discount on Bond Payable } & 788 & \\\hline \text { Interest Expense } & & 12,250 \\\hline\end{array}

Shin Company Has a Loan Agreement That Provides It with Cash

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