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Kelly Industries needs to raise capital for expansion purposes. Management is considering issuing $1,000,000 of...

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Accounting

Kelly Industries needs to raise capital for expansion purposes. Management is considering issuing $1,000,000 of 7.5% 20-year bonds dated June 1, 20X1 with interest payment dates of December 1 and June 1. Kellys year-end is December 31. Assuming the bonds were issued on June 1, 20X1 at 104 7/8 and the company used the straight-line method of amortization, the semiannual interest payment entry on December 1, 20X1 would include a A. credit to cash for $75,000.00 B. credit to interest expense for $36,281.25 C. debit to discount for $203.13 D. debit to interest expense for $38,718.75 E. debit to premium for $1,218.75

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