Salt Lake Glassware Company issues $1,121,000 of its 12%, 10-year bonds at 99 on February 28, 2017

The bonds pay interest on February 28 and August 31. Assume that Salt Lake uses the straight-line method for amortization. The journal entry to record the first interest payment on August 31, 2017 includes a ________.
A) debit to Cash for $67,260
B) debit to Interest Expense for $67,821
C) debit to Interest Expense for $66,699
D) debit to Discount on Bonds Payable for $561

B .Cash Interest Payments ($1,121,000 x 12% x 6/12 ) $67,260
Add: Amortization of Discount ($11,210 / 10 ) x 6/12 561
Total Interest Expense $67,821

Bonds Payable $1,121,000
Less: Bond Carrying Amount (1,121,000 x 99%) 1,109,790
Discount on Bonds Payable $11,210