On January 1, 2014, Istanbul Inc

On January 1, 2014, Istanbul Inc. sold bonds with a face amount of $6,000,000 and a contract rate of 10% for $5,311,770. The effective-interest rate is 12%. Interest is payable semiannually on June 30 and December 31 Istanbul uses effective interest amortization of premiums and discounts. The journal entry to record the first semi-annual payment to bondholders and amortization of discount on June 30, 2014 will include

A) a credit to Bonds Payable of $18,706.
B) a debit to Bonds Payable of $37,412.
C) a credit to Cash of $318,706.
D) a credit to Interest Payable of $300,000.