On January 1, a company issued and sold a $392,000, 5%, 10-year bond payable, and received proceeds of $387,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:

Debit Bond Interest Expense $9,550; debit Discount on Bonds Payable $250; credit Cash $9,800.

Debit Bond Interest Expense $9,800; credit Cash $9,800.

Debit Bond Interest Expense $19,600; credit Cash $19,600.

Debit Bond Interest Expense $9,800; debit Discount on Bonds Payable $250; credit Cash $10,050.

Debit Bond Interest Expense $10,050; credit Cash $9,800; credit Discount on Bonds Payable $250.

A company issued 5-year, 5% bonds with a par value of $96,000. The company received $93,947 for the bonds. Using the straight-line method, the amount of interest expense for the first semiannual interest period is:

$4,800.00.

$2,194.70.

$2,400.00.

$2,605.30.

$5,210.60.

A company issued 7%, 5-year bonds with a par value of $80,000. The market rate when the bonds were issued was 6%. The company received $83,413 cash for the bonds. Using the effective interest method, the amount of interest expense for the first semiannual interest period is:

$2,502.39.

$2,400.00.

$5,004.78.

$5,600.00.

$2,800.00.

Adidas issued 10-year, 11% bonds with a par value of $140,000. Interest is paid semiannually. The market rate on the issue date was 10%. Adidas received $148,725 in cash proceeds. Which of the following statements is True?

Adidas must pay $140,000 at maturity and no interest payments.

Adidas must pay $140,000 at maturity plus 20 interest payments of $7,000 each.

Adidas must pay $148,725 at maturity and no interest payments.

Adidas must pay $148,725 at maturity plus 20 interest payments of $7,700 each.

Adidas must pay $140,000 at maturity plus 20 interest payments of $7,700 each.