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On January 1, a company issues bonds dated January 1 with a par value of $380,000. The bonds mature in 5 years. The contract rate
On January 1, a company issues bonds dated January 1 with a par value of $380,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 6% and the bonds are sold for $396,210. The journal entry to record the first interest payment using straight-line amortization is: (Rounded to the nearest dollar.) Multiple Choice 0 Debit interest Payable $13.300: credit Cash $13,300 Debit Bond Interest Expense $14.921 credit Premium on Bonds Payable 51.621 Credit Cash $13.300 A company calls its bonds at a price of $105,000. The face value is $100,000 and the carrying value of the bonds at the retirement date is $103.745. The issuer's journal entry to record the retirement will include a Multiple Choice Debit to Premium on Bonds. Credit to Premium on Bonds Debit to Discount on Bonds
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