On January 1, 2021, Pear Corporation issues $500,000, 5-year, 10% bonds at 96. Interest is...
80.2K
Verified Solution
Link Copied!
Question
Accounting
On January 1, 2021, Pear Corporation issues $500,000, 5-year, 10% bonds at 96. Interest is paid semiannually on January 1 and July 1. Pear Corporation uses the straight-line method of amortization. The company's fiscal year ends on December 31. The necessary entry on July 1, 2021 includes:
Group of answer choices
a credit to Interest Payable of $25,000.
a credit to Cash of $27,000.
a debit to Interest Expense of $27,000.
a debit to Discount on Bonds Payable of 2,000.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
