Answer:
Date Account Dr Cr
31st Dec Interest Expense xxxxx
Premium on Bonds Payable xxxxx
Cash xxxx
Step-by-step explanation:
The direct entry would be
Date Account Dr Cr
31st Dec Interest Expense xxxxx
Premium on Bonds Payable xxxxx
Cash xxxx
where cash account is used but if interest payable is used then this entry would be
Date Account Dr Cr
31st Dec Interest Expense xxxxx
Premium on Bonds Payable xxxxx
Interest Payable xxxx
31st Dec Interest Payable xxxxx
Cash xxxxx
Where interest is calculated semiannually or annually or as the case may be