On January $1,20$X$1,$ Levan Company issued bonds with a coupon rate of $10\%($with interest paid once a year$)$ and a face amount of $$200,000.$ The bonds mature in $15$ years. The market interest rate for bonds with the

same degree of riskiness is $8\%$ compounded annually. These bonds were issued on January $1,20$X$1$ at a price of $$234,238.$ Coupon payments are made annually on December $31,$ so the first coupon payment was made

on December $31,20$X$1.$ Levan uses the effective$-$interest method on its books. Which one of the following is included in the journal entry on Levan's books to record the SECOND coupon payment made on December

$31,20x2?$

DEBIT to Interest Expense of $$18,739$

CREDIT to Discount on Bonds of $$1,261$

DEBIT to Interest Expense of $$20,000$

DEBIT to Premium on Bonds of $$1,362$

FEEDBACK

$\frac{0}{12}(0\mathrm{.}0\%)$

See section $10\mathrm{.}1,$ Accounting for Bond Interest.On January $1,20$X$1,$ Levan Company issued bonds with a coupon rate of $10\%($with interest paid once a year$)$ and a face amount of $$200,000.$ The bonds mature in $15$ years. The market interest rate for bonds with the same degree of riskiness is $8\%$ compounded annually. These bonds were issued on January $1,20$X$1$ at a price of $$234,238.$ Coupon payments are made annually on December $31,$ so the first coupon payment was made on December $31,20$X$1.$ Levan uses the effective$-$interest method on its books. Which one of the following is included in the journal entry on Levan$$s books to record the SECOND coupon payment made on December $31,20$X$2?$

DEBIT to Interest Expense of $$18,739$

CREDIT to Discount on Bonds of $$1,261$

DEBIT to Interest Expense of $$20,000$

DEBIT to Premium on Bonds of $$1,362$