On January 1, a company issued and sold a $400,000, 7%, 10-year bond payable, and received proceeds of $396,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:
A. Debit Bond Interest Expense $14,000; debit Discount on Bonds Payable $200; credit Cash $14,200.
B. Debit Bond Interest Expense $14,200; credit Cash $14,000; credit Discount on Bonds Payable $200.
C. Debit Bond Interest Expense $28,000; credit Cash $28,000.
D. Debit Bond Interest Expense $13,800; debit Discount on Bonds Payable $200; credit Cash $14,000.
E. Debit Bond Interest Expense $14,000; credit Cash $14,000.
Answer: B
You might also like to view...
The vendor sends a confirmation to establish the payable
Indicate whether the statement is true or false
The term "standard hours allowed" measures
a. budgeted output at actual hours. b. budgeted output at standard hours. c. actual output at standard hours. d. actual output at actual hours.
Which of the following is true of personal space requirements?
a. The study of space requirements is known as chronemics. b. In the United States culture, very little personal space is expected or required as compared to other cultures of the world. c. Space operates as a language, just as time does. d. All of the above statements are true.
Which of the following is NOT true regarding humor in an after-dinner speech?
a. It should be forced. b. It should be functional. c. It should develop out of the situation you are sharing. d. It should be used to help you make a point.