Question
On January 1, a company issues bonds dated January 1 with a par value of $420,000. The bonds mature in 5 years. The contract rate
On January 1, a company issues bonds dated January 1 with a par value of $420,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $403,778. The journal entry to record the first interest payment using straight-line amortization is:
Multiple Choice
a. Debit Interest Expense $20,522.20; credit Premium on Bonds Payable $1,622.20; credit Cash $18,900.00.
b. Debit Interest Expense $17,277.80; debit Discount on Bonds Payable $1,622.20; credit Cash $18,900.00.
c. Debit Interest Expense $18,900.00; credit Cash $18,900.00.
d. Debit Interest Expense $20,522.20; credit Discount on Bonds Payable $1,622.20; credit Cash $18,900.00.
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THIRD PARTY RISK MANAGEMENT An Essential Guide To Best Practices Including Common Interview Questions And Their Expert Answers
Authors: Akingbade Akinfenwa
1st Edition
1649537417, 978-1649537416
