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On July 1,2014, CAP1 Banking Corp. issued $4,000,000 of 10-year, 8% bonds at 97. CAP1...

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Accounting

On July 1,2014, CAP1 Banking Corp. issued $4,000,000 of 10-year, 8% bonds at 97. CAP1 uses the straight-line amortization method to determine interest expense. Interest is paid each June 30 and December 31. The entry recorded by CAP1 on June 30,2024 upon maturity at the end of the bond's term will include:
credit to Discount on Bonds Payable of $120,000.
debit to Bonds Payable of $4,000,0000
credit to Cash of $3,880,000
debit to Cash of $4,000,000.
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