Question
In: Accounting
On January 1, a company issues bonds dated January 1 with a par value of $300,000....
On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $288,413. The journal entry to record the first interest payment using the effective interest method of amortization is:
A) Debit Interest Expense $12,579; debit Discount on Bonds Payable $921; credit Cash $13,500.
B) Debit Interest Expense $12,579; debit Premium on Bonds Payable $921; credit Cash $13,500.
C) Debit Interest Expense $14,421; credit Discount on Bonds Payable $921; credit Cash $13,500.
D) Debit Interest Expense $14,421; credit Premium on Bonds Payable $921; credit Cash $13,500.
E) Debit Interest Payable $13,500; credit Cash $13,500.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
1. On January 1, a company issues bonds dated January 1 with a par value of...
1. On January
1, a company issues bonds dated January 1 with a par value of
$260,000. The bonds mature in 5 years. The contract rate is 7%, and
interest is paid semiannually on June 30 and December 31. The
market rate is 6% and the bonds are sold for $271,091. The journal
entry to record the first interest payment using straight-line
amortization is: (Rounded to the nearest dollar.)
Multiple Choice
Debit Bond Interest
Expense $10,209; credit Discount on Bonds...
On January 1, a company issues bonds dated January 1 with a par value of $330,000....
On January 1, a company issues bonds dated January 1 with a par
value of $330,000. The bonds mature in 5 years. The contract rate
is 9%, and interest is paid semiannually on June 30 and December
31. The market rate is 10% and the bonds are sold for $317,254. The
journal entry to record the issuance of the bond is:
Multiple Choice
Debit Cash $317,254; debit Discount on Bonds Payable $12,746;
credit Bonds Payable $330,000.
Debit Cash $330,000; credit...
On January 1, a company issues bonds dated January 1 with a par value of $380,000....
On January 1, a company issues bonds dated January 1 with a par
value of $380,000. The bonds mature in 5 years. The contract rate
is 7%, and interest is paid semiannually on June 30 and December
31. The market rate is 6% and the bonds are sold for $396,210. The
journal entry to record the issuance of the bond is:
Multiple Choice
Debit Cash $380,000; debit Premium on Bonds Payable $16,210;
credit Bonds Payable $396,210.
Debit Cash $396,210; credit...
On January 1, a company issues bonds dated January 1 with a par value of $400,000....
On January 1, a company issues bonds dated January 1 with a par
value of $400,000. The bonds mature in 5 years. The contract rate
is 7%, and interest is paid semiannually on June 30 and December
31. The market rate is 8% and the bonds are sold for $383,793. The
journal entry to record the issuance of the bond is:
a. Debit Cash $383,793; debit Discount on Bonds Payable $16,207;
credit Bonds Payable $400,000.
b. Debit Bonds Payable $400,000;...
On January 1, a company issues bonds dated January 1 with a par value of $390,000....
On January 1, a company issues bonds dated January 1 with a par
value of $390,000. The bonds mature in 5 years. The contract rate
is 9%, and interest is paid semiannually on June 30 and December
31. The market rate is 8% and the bonds are sold for $405,830. The
journal entry to record the first interest payment using the
effective interest method of amortization is: (Rounded to
the nearest dollar.)
a. Debit Bond Interest Expense 19,133.00; credit Premium...
On January 1, a company issues bonds dated January 1, 2018 with a par value of...
On January 1, a company issues bonds dated January 1, 2018 with
a par value of $300,000. The bonds mature in 5 years. The contract
rate is 9%, and interest is paid annually on December 31. The bonds
are sold for $312,200. The journal entry to record the first
interest payment using straight-line amortization is:
Muheet Corporation issues $550,000, 10%, 5-year bonds on January
1, 2019 for $489,000. Interest is paid annually on January 1. If
Muheet Corporation uses the...
On January 1, a company issues bonds dated January 1 with a par value of $770,000....
On January 1, a company issues bonds dated January 1 with a par
value of $770,000. The bonds mature in 3 years. The contract rate
is 8%, and interest is paid semiannually on June 30 and December
31. The bonds are sold for $761,000. The journal entry to record
the first interest payment using straight-line amortization is:
Multiple Choice
Debit Interest Payable $30,800; credit Cash $30,800.
Debit Interest Expense $30,800; credit Cash $30,800.
Debit Interest Expense $32,300; credit Discount on...
12. On January 1, a company issues bonds dated January 1 with a par value of...
12. On January 1, a company issues bonds dated January 1 with a
par value of $740,000. The bonds mature in 3 years. The contract
rate is 10%, and interest is paid semiannually on June 30 and
December 31. The bonds are sold for $719,000. The journal entry to
record the first interest payment using straight-line amortization
is:
16. On January 1, a company issues bonds dated January 1 with a
par value of $330,000. The bonds mature in 5...
On January 1, a company issues bonds dated January 1 with a par value of $390,000....
On January 1, a company issues bonds dated January 1 with a par
value of $390,000. The bonds mature in 5 years. The contract rate
is 9%, and interest is paid semiannually on June 30 and December
31. The market rate is 8% and the bonds are sold for $405,830. The
journal entry to record the first interest payment using
straight-line amortization is: (Rounded to the nearest dollar.)
On January 1, a company issues bonds dated January 1 with a par value of $390,000....
On January 1, a company issues bonds dated January 1 with a par
value of $390,000. The bonds mature in 5 years. The contract rate
is 9%, and interest is paid semiannually on June 30 and December
31. The market rate is 8% and the bonds are sold for $405,830. The
journal entry to record the first interest payment using
straight-line amortization is: (Rounded to the nearest
dollar.)
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