Question Help S500,000 of 8%, 10-year bonds were sold for SS20.000 on Jruary 1.

Question

Question Help S500,000 of 8%, 10-year bonds were sold for SS20.000 on Jruary 1. The bords mano serían al interest payments on June 30 and December 31, The entry to record the June 30 interest payment on the bonds would be to O A. debit Interest Expense $19,000, debit Premium on bonds payable, $1,000, credit Cash, $20,000 O B. debit Interest Expense $20,000, credit Cash $20.000. O C. debit Interest Expense $19,000; credit Cash, $19.000 OD debit Interest Expense $21,000, credit Premium on bonds payable, $1,000, credit Cash $20,000 Click to select your answer Chapter 9 quiz Flashcards | Quizlet 888 p. 3 on command command option

Explanation / Answer

premium on bonds 520,000-500,000 = $20,000 amortization of premium(straight line) = 20,000/(10*2) 1000 journal entry Account titles & Explanations Debit Credit interest expense 19,000 premium on bonds 1,000 cash (500,000*8%*1/2) 20000 hence answer )option A

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