Exhibit 14-5 Hawk Issued $200,000 of Its Ten-Year 10% Bonds

Exhibit 14-5 Hawk issued $200,000 of its ten-year 10% bonds for $224,924 on October 1, 2014. The effective rate on the bonds was 8% and interest is paid each October 1 and April 1.
-Refer to Exhibit 14-5. Assuming Hawk uses the effective interest method, the adjusting entry on December 31, 2014, would include a

A) credit to Premium on Bonds Payable for $502
B) credit to Interest Payable for $4,498
C) credit to Interest Payable for $5,000
D) debit to Interest Expense for $5,498