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What the entry to record the interest payment would be

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RML Inc Issues $400,000 of 9% 5-year bonds on January 1, 2020. The market interest rate is 6% and interest is paid annually on December 31. The company uses the effective-interest method

Problem 1: Because this bond is a _________ bond, and the entry to record the interest payment would be _________

Option 1: Premium: Dr. Bond interest expense; Dr. Bond payable Cr. Cash

Option 2: Discount: Dr. Bond interest expense; Cr. Discount on bonds payable Cr. Cash

Option 3: Discount: Dr. Bond interest expense; Cr. Bond payable Cr. Cash

Option 4: Premium; Dr. Bond interest expense; Dr. Premium on Bond payable Cr. Cash

Option 5: Premium; Dr. Bond interest expense; Cr Cash

Reference no: EM132962616

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