Q.6

On November 1, 2021, Southwoods Inc. issued 8% bonds, dated November 1, with a face amount of $5,000,000. The bonds sold for 4,539,966 and mature on October 31, 2041 (20 years). The market yield for bonds of similar risk and maturity was 9%. Interest is paid semiannually on April 30 and October 31. Southwoods fiscal year ends on December 31st. The journal entry to record the payment first interest payment on April 30, 2022 would include:

Multiple Choice

• A debit to interest expense of $68,099

• A debit to interest expense of $136,199

• A debit to interest expense of $204,298

• A debit to interest expense of $133,333