Question
On 10/1/X1, Openshaw, Inc issued $1,000,000 of bonds at a price of 98. Assuming the bonds have a 3-year term and bear interest at an
On 10/1/X1, Openshaw, Inc issued $1,000,000 of bonds at a price of 98. Assuming the bonds have a 3-year term and bear interest at an annual stated rate of 6% payable semi-annually.
What is the 12/31/X1 adjusting journal entry to record interest (using the straight line method?)
a.
Interest Expense $66,667
Interest Payable 60,000 Bond Premium 6,667
b.
Interest Expense $16,667 Interest Payable 15,000 Bond Discount 1,667
c.
Interest Expense $66,667 Interest Payable 60,000 Bond Discount 6,667
d.
Interest Expense $16,667 Interest Payable 15,000 Bond Premium 1,667
Group of answer choices
a
b
c
d
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