On January 1, Xiang Corporation issues $500,000, 5-year, 12% bonds at 96 with interest payable on January

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On January 1, Xiang Corporation issues $500,000, 5-year, 12% bonds at 96 with interest payable on 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 a:

(a) debit to Interest Expense $57,600.

(b) debit to Interest Expense $60,000.

(c) credit to Discount on Bonds Payable $4,000.

(d) credit to Discount on Bonds Payable $2,000.

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Financial Accounting

ISBN: 9781118953907

8th Edition

Authors: Paul D Kimmel, Jerry J Weygandt, Donald E Kieso

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