On January 1, 2013, a Company Issued and Sold a $400,000

On January 1, 2013, a company issued and sold a $400,000, 7%, 10-year bond payable and received proceeds of $396,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:

A) $\begin{array}{|c|r|r|}\hline \text { Bond Interest Expense } & 14,000 & \\\hline \text { Cash } & & 14,000 \\\hline\end{array}$
B) $\begin{array}{|c|r|r|}\hline \text { Bond Interest Expense } & 28,000 & \\\hline \text { Cash } & & 28,000 \\\hline\end{array}$
C) $\begin{array}{|l|r|r|}\hline \text { Bond Interest Expense } & 14,200 & \\\hline \text { Cash } & & 14,000 \\\hline \text { Discount on Bonds Payable } & & 200 \\\hline\end{array}$
D) $\begin{array}{|c|r|r|}\hline \text { Bond Interest Expense } & 13,800 & \\\hline \text { Discount on Bonds Payable } & 200 & \\\hline \text { Cash } & & 14,000 \\\hline\end{array}$
E) $\begin{array}{|l|r|r|}\hline \text { Bond Interest Expense } & 14,000 & \\\hline \text { Discount on Bonds Payable } & 200 & \\\hline \text { Cash } & & 14,200 \\\hline\end{array}$