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On December 31 Wintergreen, Incorporated, issued $150,000 of 7 percent, 10 -year bonds at a discount of $10,125. The bonds pay interest semiannually. Wintergreen uses
On December 31 Wintergreen, Incorporated, issued $150,000 of 7 percent, 10 -year bonds at a discount of $10,125. The bonds pay interest semiannually. Wintergreen uses the straight-line bond amortization method. The entry to record each interest payment includes a debit to Bond interest Expense for $5.756, a credit to Discount on Bonds Payable for $506, and a credit to Cash for $5,250. At December 31 year 2 the carrying value of the bonds will equal $0 $140,887 $150,000 $160,125 If the contract rate is more than the market rate, the bond will sell at: par value more than par (premium) less than par (discount)
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