Exhibit 14-5 Quail Issued $200, 000 of Its Ten-Year 12

Exhibit 14-5 Quail issued $200, 000 of its ten-year 12% bonds for $224, 924 on October 1, 2010.The effective rate on the bonds was 10% and interest is paid each October 1 and April 1.
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Refer to Exhibit 14-5.Assuming Quail uses the effective interest method, the adjusting entry on December 31, 2010, would include a

A) debit to Premium on Bonds Payable for $1, 250
B) credit to Interest Payable for $5, 623
C) credit to Interest Payable for $6, 000
D) debit to Interest Expense for $6, 623