On the first day of the fiscal year, Lisbon Co issued $1,000,000 of 10-year, 7% bonds for $1,050,000, with interestpayable semiannually. Orange Inc purchased the bonds on the issue date for the issue price. If Lisbon uses thestraight-line method for amortizing the premium, the journal entry to record the first semiannual interest payment byLisbon Co would include a debit to

a. Interest Payable for $30,000 b. Interest Expense for $32,500
c. Cash for $70,000 d. Premium on Bonds Payable for $5,500


b

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