A Company Received Cash Proceeds of $206,948 on a Bond

Multiple Choice

A company received cash proceeds of $206,948 on a bond issue with a par value of $200,000. The difference of $6,948 between par value and issue price for this bond is recorded as a:

A) Credit to Interest Income.
B) Credit to Premium on Bonds Payable.
C) Credit to Discount on Bonds Payable.
D) Debit to Premium on Bonds Payable.
E) Debit to Discount on Bonds Payable.