2. On January 1, a company issued and sold a $409,000, 6%, 10-year bond payable, and received proceeds of $404,000. 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: A. Debit Bond Interest Expense $12,270; credit Cash $12,270 B. Debit Bond Interest Expense $24,540; credit Cash $24,540 C. Debit Bond Interest Expense $12,020; debit Discount on Bonds Payable $250; credit Cash $12,270 D. Debit Bond Interest Expense $12,270; debit Discount on Bonds Payable $250; credit Cash $12,520 E. Debit Bond Interest Expense $12,520; credit Cash $12,270; credit Discount on Bonds Payable $250

2. On January 1, a company issued and sold a $409,000, 6%, 10-year bond payable, and received proceeds of $404,000. 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: A. Debit Bond Interest Expense $12,270; credit Cash $12,270 B. Debit Bond Interest Expense $24,540; credit Cash $24,540 C. Debit Bond Interest Expense $12,020; debit Discount on Bonds Payable $250; credit Cash $12,270 D. Debit Bond Interest Expense $12,270; debit Discount on Bonds Payable $250; credit Cash $12,520 E. Debit Bond Interest Expense $12,520; credit Cash $12,270; credit Discount on Bonds Payable $250

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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