On January 1, Parson Freight Company issues 8.5%, 10-year bonds with a par value of $2,300,000. The bonds pay interest semiannually. The market rate of interest is 9.5% and the bond selling price was $2,143,712. The bond issuance should be recorded as:
A. Debit Cash $2,143,712; debit Discount on Bonds Payable $156,288; credit Bonds Payable $2,300,000.
B. Debit Cash $2,143,712; credit Bonds Payable $2,143,712.
C. Debit Cash $2,300,000; credit Bonds Payable $2,143,712; credit Discount on Bonds Payable $156,288.
D. Debit Cash $2,143,712; debit Interest Expense $156,288; credit Bonds Payable $2,300,000.
E. Debit Cash $2,300,000; credit Bonds Payable $2,300,000.
Answer: A
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