Sanders Corporation issued $ 470,000 of 9%, 10-year bonds payable at a price of 91. The market interest rate at the date of issuance was 10%, and the bonds pay interest semiannually. The journal entry to record the first semiannual interest payment using the effective-interest amortization method is :
A. Date Accounts and Explanation Debit Credit Interest Expense 23,735 Discount on Bonds Payable 235 Cash 23,500
B. Date Accounts and Explanation Debit Credit Interest Expense 27,307 Discount on Bonds Payable 3,807 Cash 23,500
C. Date Accounts and Explanation Debit Credit Interest Expense 24,957 Discount on Bonds Payable 3,807 Cash 21,150
D. Date Accounts and Explanation Debit Credit Interest Expense 21,385 Discount on Bonds Payable 235 Cash 21,150

He moto hotel opened for business on may 1, 2017. here is its trial balance before adjustment on may 31. moto hotel trial balance may 31, 2017 debit credit cash $ 2,283 supplies 2,600 prepaid insurance 1,800 land 14,783 buildings 72,400 equipment 16,800 accounts payable $ 4,483 unearned rent revenue 3,300 mortgage payable 38,400 common stock 59,783 rent revenue 9,000 salaries and wages expense 3,000 utilities expense 800 advertising expense 500 $114,966 $114,966 other data: 1. insurance expires at the rate of $360 per month. 2. a count of supplies shows $1,050 of unused supplies on may 31. 3. (a) annual depreciation is $2,760 on the building. (b) annual depreciation is $2,160 on equipment. 4. the mortgage interest rate is 5%. (the mortgage was taken out on may 1.) 5. unearned rent of $2,580 has been earned. 6. salaries of $810 are accrued and unpaid at may 31