USE THE FOLLOWING INFORMATION FOR QUESTIONS #2-6: R&R has the following information: 2 Number of bonds 2,500 Par value per bond $ 1,200 Bonds are dated 1/1/X1 Bonds are issued 1/1/X1 Years to maturity 5 Stated interest rate 6% Effective Interest rate 8% Interest is paid on Interest is paid on Jan. 1 *Use the tables provided in the Chapter 14 folder of the Files tab in Canvas for your PV Factors 7 3 July 1 I 2. Will this bond be sold at a premium, discount, or for par value? A. Premium B. Discount 5 C. Par Value 7 3 3. What is the initial value (issuance price) of the bonds? I 2 4. What is the journal entry for the 7/1/X1 interest payment? A. Debit Bond Interest Expense for $69,734, Debit Premium on Bonds Payable for $20,266, and Credit Cash for $90,000 B. Debit Bond Interest Expense for $90,000 and Credit Cash for $90,000 5 C. Debit Bond Interest Expense for $110,266, Credit Discount on Bonds Payable for $20,266, and Credit Cash for $90,000 D. Debit Bond Interest Expense for $220,834, Credit Discount on Bonds Payable for $40,834, and Credit Cash for $180,000