hapters 10 and 11 M/C Bing ia D Facebook D Twitter D LinkedIn D The weather Chan

Question

hapters 10 and 11 M/C Bing ia D Facebook D Twitter D LinkedIn D The weather Channel D Yelp D Trip Help Save & Exit Submi on January 14company issued and sold a $398,000, 6%, 10-year bond payable, and received proceeds of $393,000. 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: 9:39 Multiple Choice Debi Bond Interest Expense $t1940. credit Cash $1940 Debit Bond Interest Expense $23,880: credit Cash $23,880. Debit Bond Interest Expense $11,940; debit Discount on Bonds Payable $250, credit Cash $12.190 5 of 20 Next >

Explanation / Answer

The journal entry to record the first interest payment is:

General Journal Debit Credit Bond Interest Expense $12,190 Cash($398,000 x 0.06 x 1/2) $11,940 Discount on Bonds Payable($398,000 - $393,000)/20 $250

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