On January 1st, XYZ Company issued $200,000, 5-year, 4% bonds. The market rate at the time of the sale was greater than 4% so the bonds were sold at 93. Interest is payable June 30th and December 31st. If the XYZ Company uses the straight-line method to amortize discount on the bonds, the entry to record the first interest payment would include:
A.
Debit to Interest Expense for $5,400.
B.
Debit to Interest Expense for $9,400.
C.
Credit to Cash for $5,400.
D.
Debit to Discount on Bonds Payable for $1,400.