w History WindowHelp yses.pdf ( page 1 of e & 10 Connect ers 9 &106 Help Save &

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w History WindowHelp yses.pdf ( page 1 of e & 10 Connect ers 9 &106 Help Save & Exit Sub Saved On January 1, a company issues bonds dated January 1 with a par value of $630,000. The bonds mature in 3 years. The contract rte is 9%, and interest is paid semiannually on June 30 and December 31, The bonds are sold for $609,000. The journal entry to record the first interest payment using straight-ine amortization is: Multiple Choice Debit Interest Payable $28,350, credit Cash $28,350 Debit Interest Expense $28.350, credit Cash $28,350. Debit Interest Expense $31,850, credit Discount on Bonds Payable $3,500, credit Cash $28,350 21

Explanation / Answer

The Answer is "C"

Journal Entry :-

Working Note :-

Discount on Bonds Payable = ($630000 - $609000)/6

= $21000 / 6

= $3500

Cash = $630000 * 9% * (1/2)

= $28350

Particulars Debit($) Credit($) Interest Expense A/c Dr. 31850 To Discount on Bonds Payable A/c 3500 To Cash A/c 28350

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