Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 1, a company issues bonds dated january

On January 1, a company issues bonds dated January 1 with a par...

90.2K

Verified Solution

Question

Accounting

On January 1, a company issues bonds dated January 1 with a par value of $430,000. 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 $412,577. The journal entry to record the first interest payment using the effective interest method of amortization is:
Multiple Choice
Debit Interest Expense $16,503; credit Premium on Bonds Payable $1,453; credit Cash $15,050.
Debit Interest Expense $13,597; debit Discount on Bonds Payable $1,453; credit Cash $15,050.
Debit Interest Payable $15,050; credit Cash $15,050.
Debit Interest Expense $16,503; credit Discount on Bonds Payable $1,453; credit Cash $15,050.
Debit Interest Expense $13,597; debit Premium on Bonds Payable $1,453; credit Cash $15,050.
image

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: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Civil Engineering
1.2K views

What elements of the electrical system should the interior designer be familiar with?

Psychology
1.2K views

thoughts on the value of diversity in the lives of children and adolescents. what extent growing...

Economics
1.2K views

Is AIG too big to fail? 250 words

Biology
1.2K views

Oxygen Carbon dioxide Water photosynthesis belong to Sunlight SPINN Item Plant Soil Carbon dioxide Water...

Physics
1.2K views

0 If given wave has propagation constant 511 rad m then phase difference between two...

Basic Math
1.2K views

Let p and q be the propositions p It is sunny q It is hot...

Statistics
1.2K views

e weight chart shown to e right which is in the agazine style of graph...

Calculus
1.2K views

Find the vertices, foci, equation of the asymptotes, transverse and conjugate axis length for 9y...

Accounting
1.2K views

how to add 3 photos one page

Accounting
1.2K views

4.2 PROVIDE documentary proof that you met with these clients and presented them with the...

Accounting
1.2K views

On July 1, 2020, Teal Inc. made two sales. 1. ...

Accounting
1.2K views

Calculator Financial statement data for the years ended December 31 for Parker Corporation are as...