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Salley Company issues $5,000,000 face value, 6%, 10-year bonds payable on January 1, 2020. Interest is paid semi-annually each June 30 and December 31. The
Salley Company issues $5,000,000 face value, 6%, 10-year bonds payable on January 1, 2020. Interest is paid semi-annually each June 30 and December 31. The bonds sell at $5,100,000. Salley uses the straight-line method of amortizing bond discount or premium. The journal entry to record the second semi-annual interest payment on December 31 would include: Credit to Interest Expense, $5,000. Credit to Cash, $150,000. Debit to Interest Payable, $145,000. Debit to Discount on Bond Payable, $5,000
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