A company issued 9%, 15-year bonds with a par value of $650,000 that pay interest semiannually....

A company issued 9%, 15-year bonds with a par value of $650,000 that pay interest semiannually. The market rate on the date of issuance was 9%. The journal entry to record each semiannual interest payment is:

Multiple Choice

Debit Bond Interest Expense $29,250; credit Cash $29,250.
Debit Bond Interest Payable $43,333; credit Cash $43,333.
Debit Bond Interest Expense $600,000; credit Cash $600,000.
No entry is needed, since no interest is paid until the bond is due.
Debit Bond Interest Expense $58,500; credit Cash $58,500.

Expert Solution

The entry would be

Dr.... Bond interest expense 29,250

Cr.... Cash 29,250

(650,000*9%*1/2)

Option A

ekkarill92 answered 2 years ago

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