On January 1, 2017, Istanbul Inc. sold bonds with a face amount of $7,000,000 and a...

On January 1, 2017, Istanbul Inc. sold bonds with a face amount of $7,000,000 and a contract rate of 10% for $6,197,065. The effective-interest rate is 12%. Interest is payable annually on January Istanbul uses effective interest amortization of premiums and discounts.

The journal entry to record the first interest accrual and amortization of discount on December 31, 2017 will include

a credit to Cash of $743,648.

a credit to Bonds Payable of $43,648.

a credit to Bonds Payable of $96,352.

a credit to Interest Payable of $840,000.

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Expert Solution

ekkarill92 answered 2 years ago

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