On January 1, a company issued and sold a $404,000, 6%, 10-year bond payable, an

ID: 2501675 • Letter: O

Question

On January 1, a company issued and sold a $404,000, 6%, 10-year bond payable, and received proceeds of $399,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:

Debit Bond Interest Expense $11,870; debit Discount on Bonds Payable $250; credit Cash $12,120.

Debit Bond Interest Expense $12,120; credit Cash $12,120.

Debit Bond Interest Expense $24,240; credit Cash $24,240.

Debit Bond Interest Expense $12,370; credit Cash $12,120; credit Discount on Bonds Payable $250.

Debit Bond Interest Expense $12,120; debit Discount on Bonds Payable $250; credit Cash $12,370.

Explanation / Answer

The journal entry to record the first interest payment is: Debit Bond Interest Expense $12,370; credit Cash $12,120; credit Discount on Bonds Payable $250.

Debit Credit

Debit Bond Interest Expense $12,370;

credit Cash $12,120;

credit Discount on Bonds Payable $250.

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On January 1, a company issued and sold a $400,000, 7%, 10-year bond payable, an

On January 1, a company issued and sold a $405,000, 5%, 10-year bond payable, an

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On January 1, a company issued and sold a $404,000, 6%, 10-year bond payable, an

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