Salt Lake Glassware Company issues $1,121,000 of its 12%, 10-year bonds at 99 on February 28, 2017
The bonds pay interest on February 28 and August 31. Assume that Salt Lake uses the straight-line method for amortization. The journal entry to record the first interest payment on August 31, 2017 includes a ________.
A) debit to Cash for $67,260
B) debit to Interest Expense for $67,821
C) debit to Interest Expense for $66,699
D) debit to Discount on Bonds Payable for $561
B .Cash Interest Payments ($1,121,000 x 12% x 6/12 ) $67,260
Add: Amortization of Discount ($11,210 / 10 ) x 6/12 561
Total Interest Expense $67,821
Bonds Payable $1,121,000
Less: Bond Carrying Amount (1,121,000 x 99%) 1,109,790
Discount on Bonds Payable $11,210
You might also like to view...
Competitors are most likely to react to a price change when ________
A) the firm has a weak value proposition B) the firm enjoys a monopoly C) there are few competing firms D) the product is heterogeneous E) buyers have limited information
Using vertical analysis of the income statement, a company's net income as a percentage of net sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%
Indicate whether the statement is true or false
Nutritreat Industries Corp. is a manufacturer of food products. The company introduced chocolate cookies to the local market
After a period of initial success, the product lost its market and Nutritreat decided to withdraw chocolate cookies from the market. This scenario is an example of the _____ stage of a product life cycle. a. introduction b. growth c. maturity d. decline
What are the two main factors that influence organizational politics?
a. Agency and Individual b. Corporate and Customer c. Association and Character d. Organizational and Individual