The Frozen Lake Company issues $503,000 of 10%, 10-year bonds at 107 on March 31, 2017
The bond pays interest on March 31 and September 30. Assume that the company uses the straight-line method for amortization. The journal entry to record the first interest payment on September 30, 2017 includes a ________.
A) debit to Cash for $25,150
B) debit to Interest Expense for $26,911
C) debit to Interest Expense for $23,389
D) credit to Premium on Bonds Payable for $1,761
C .Cash Interest Payment ($503,000 x 10% x 6/12 ) $25,150
Less: Amortization of Premium
[($35,210 / 10 x 6/12 )} 1,761
Total Interest Expense $23,389
Bond Carrying Amount (503,000 x 107%) $538,210
Bonds Payable 503,000
Premium $35,210
You might also like to view...
When a manufacturer offers to pay part of the costs of a retail advertising campaign, it is:
A) incentive marketing B) target market advertising C) cooperative advertising D) specialty advertising
Time-series information is time-stamped information collected at a particular frequency.
Answer the following statement true (T) or false (F)
Electronic communications networks (ECNs) provide an alternative trading medium, which has increased competition with the stock exchanges.
Answer the following statement true (T) or false (F)
When a new employee is hired and enrolled in the company benefits plan, this would involve using the human resources module
Indicate whether the statement is true or false