Alan Smith Antiques issued its 12%, 10-year bonds payable at a price of $638,550 (face value is $700,000). The company uses the straight-line amortization method for the bond discount or premium. Interest expense for each year is (Round your answer to the nearest whole dollar.) A. $76,626. B. $77,855. C. $90,145. D. $84,000. Starco signed a 5-year note payable on January 1, 2025, of $375,000. The note requires annual principal payments each December 31 of $75,000 plus interest at 13%. The entry to record the annual payment on December 31, 2026, includes A. a debit to Interest Expense for $48,750. B. a credit to Cash of $123,750. C. a debit to Interest Expense for $39,000. D. a credit to Notes Payable for $75,000.
Alan Smith Antiques issued its 12%, 10-year bonds payable at a price of $638,550 (face value is $700,000). The company uses the straight-line amortization method for the bond discount or premium. Interest expense for each year is (Round your answer to the nearest whole dollar.) A. $76,626. B. $77,855. C. $90,145. D. $84,000. Starco signed a 5-year note payable on January 1, 2025, of $375,000. The note requires annual principal payments each December 31 of $75,000 plus interest at 13%. The entry to record the annual payment on December 31, 2026, includes A. a debit to Interest Expense for $48,750. B. a credit to Cash of $123,750. C. a debit to Interest Expense for $39,000. D. a credit to Notes Payable for $75,000.
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 14MC: Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the...
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