Exhibit 14-10 Hawk Issued $500,000 of Its Ten-Year 5% Bonds for $463,197

Exhibit 14-10
Hawk issued $500,000 of its ten-year 5% bonds for $463,197 on October 1, 2016 so as to yield an effective rate of 6%. Interest is paid each October 1 and April 1
-Refer to Exhibit 14-10. Assuming Hawk uses the effective interest method and reversing entries, the entry to record the payment of interest on April 1, 2017, would include rounded to the nearest dollar)

A) a credit to Discount on Bonds Payable for $1,396.
B) a debit to Discount on Bonds Payable for $1,396.
C) a debit to Interest Expense for $11,580.
D) a credit to Cash for $12,500.