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On January 1, 2021, Pear Corporation issues $500,000, 5-year, 10% bonds at 96. Interest is...

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Accounting

On January 1, 2021, Pear Corporation issues $500,000, 5-year, 10% bonds at 96. Interest is paid semiannually on January 1 and July 1. Pear Corporation uses the straight-line method of amortization. The company's fiscal year ends on December 31. The necessary entry on July 1, 2021 includes:

Group of answer choices

a credit to Interest Payable of $25,000.

a credit to Cash of $27,000.

a debit to Interest Expense of $27,000.

a debit to Discount on Bonds Payable of 2,000.

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