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On January 1, 2013, $800,000, 5-year, bonds with a contract rate of 8% payable annually were issued for cash of $684,627 when the market rate
On January 1, 2013, $800,000, 5-year, bonds with a contract rate of 8% payable annually were issued for cash of $684,627 when the market rate of interest was 12%. The first annual cash interest payment was $64,000 while that period's interest expense was calculated as $82,155.24. How would the company record the journal entry to record this first annual interest payment?
Debit Cash for $684,627, debit Discount on Bonds Payable for $115,373, and credit Bonds Payable for $800,000. | |
Debit Interest Expense for $82,155.24 and credit Cash for $82,155.24. | |
Debit Interest Expense for $64,000.00 and credit Cash for $64,000.00. | |
Debit Interest Expense for $82,155.24, credit Discount on Bonds Payable for $18,155.24, and credit Cash for $64,000.00. | |
Debit Interest Expense for $64,000.00, debit Discount on Bonds Payable for $18,155.24 and credit Cash for $82,155.24 |
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