On January 1, 2010, a Company Issued and Sold an $850,000

On January 1, 2010, a company issued and sold an $850,000, 6%, 5-year bond payable and received proceeds of $825,000. 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) $\begin{array} { | c | r | r | } \hline \text { Bond Interest Expense } & 25,500 & \\\hline \text { Cash } & & 25,500 \\\hline\end{array}$
B) $\begin{array} { | c | r | r | } \hline \text { Bond Interest Expense } & 51,000 & \\\hline \text { Cash } & & 51,000 \\\hline\end{array}$
C) $\begin{array} { | l | r | r | } \hline \text { Bond Interest Expense } & 28,000 & \\\hline \text { Discount on Bonds Payable } & & 2,500 \\\hline \text { Cash } & & 25,500 \\\hline\end{array}$
D) $\begin{array} { | l | r | r | } \hline \text { Bond Interest Expense } & 23,000 & \\\hline \text { Discount on Bonds Payable } & 2,500 & \\\hline \text { Cash } & & 25,500 \\\hline\end{array}$
E) $\begin{array} { | l | r | r | } \hline \text { Bond Interest Expense } & 25,500 & \\\hline \text { Discount on Bonds Payable } & 2,500 & \\\hline \text { Cash } & & 28,000 \\\hline\end{array}$