On January 1, Hurley Corporation issues $1,000,000, 5-year, 12% bonds at 96 with interest payable on July 1 and January 1.

On January 1, Hurley Corporation issues $1,000,000, 5-year, 12% bonds at 96 with interest payable on July 1 and January 1. The entry on December 31 to record accrued bond interest and the amortization of bond discount using the straight-line method will include adebit to Interest Expense, $120,000. credit to Discount on Bonds Payable, $8,000. credit to Discount on Bonds Payable, $4,000. debit to Interest Expense, $60,000.