On April 1, year 1, Greenway Corporation issues $20 million of 10%, 20-year bond

Question

On April 1, year 1, Greenway Corporation issues $20 million of 10%, 20-year bonds payable at par. Interest on the bonds is payable semiannually each April 1 and October 1. Refer to the above data. The journal entry to record the first cash payment to bondholders on October 1, year 1.with respect to this bond issue, Greenway balance sheet at December 31, year 1, will include a) bond payable of 20,500,000 b) band pable of 19,500,000 c) bond payable of 20 million, as well as interest payable of 1,500,000 d) bond payable of 20 million, as well as interest payable of 500,000

Explanation / Answer

On April 1, year 1, Greenway Corporation issues $20 million of 10%, 20-year bonds payable at par. Interest on the bonds is payable semiannually each April 1 and October 1. Refer to the above data. The journal entry to record the first cash payment to bondholders on October 1, year 1.with respect to this bond issue, Greenway balance sheet at December 31, year 1, will include

a) bond payable of 20,500,000

b) band pable of 19,500,000

c) bond payable of 20 million, as well as interest payable of 1,500,000

d) bond payable of 20 million, as well as interest payable of 500,000

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