Use the Following Information for Questions 55 and 56

question 6

Multiple Choice

Use the following information for questions 55 and 56.
On May 1, 2014, Payne Co. issued $900,000 of 7% bonds at 103, which are due on April 30, 2024. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Payne's common stock, $15 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2014, the fair value of Payne's common stock was $35 per share and of the warrants was $2.
-On May 1, 2014, Payne should record the bonds with a

• A) discount of $36,000.
• B) discount of $10,080.
• C) discount of $ 9,000.
• D) premium of $27,000.