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Debit Interest Expense $10.83190; debit Discount on Bonds Payable $1,418.10; credit Cash $12.250.00 Debit interest Expense $13,668.10, credit Discount on Bonds Payable $1.418.10, credit Cash $12.250.00 Debit interest Expense $12,250.00, credit Cash $12.250.00 Debit Interest Expense $13,668.10; credit Premium on Bonds Payable $1,418.10; credit Cash $12.250.00 Debit interest Payable $12.250.00; credit Cash $12.250.00

Debit Interest Expense $10.83190; debit Discount on Bonds Payable $1,418.10; credit Cash $12.250.00 Debit interest Expense $13,668.10, credit Discount on Bonds Payable $1.418.10, credit Cash $12.250.00 Debit interest Expense $12,250.00, credit Cash $12.250.00 Debit Interest Expense $13,668.10; credit Premium on Bonds Payable $1,418.10; credit Cash $12.250.00 Debit interest Payable $12.250.00; credit Cash $12.250.00

FINANCIAL ACCOUNTING
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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On January 1, a company issues bonds dated January 1 with a par value of $350,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $335,819. The journal entry to record the first interest payment using straight-line amortization is: Multiple Choice Debit Interest Expense $10,831.90; debit Discount on Bonds Payable $1,418.10; credit Cash $12,250,00 Debit Interest Expense $13,668.10, credit Discount on Bonds Payable $1,418.10, credit Cash $12,250.00 Debit Interest Expense $12,250.00, credit Cash $12.250.00 Debit interest Expense $13,668.10; credit Premium on Bonds Payable $1,418.10; credit Cash $12,250,00 Debit interest Payable $12.250.00; credit Cash $12.250.00
Transcribed Image Text:On January 1, a company issues bonds dated January 1 with a par value of $350,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $335,819. The journal entry to record the first interest payment using straight-line amortization is: Multiple Choice Debit Interest Expense $10,831.90; debit Discount on Bonds Payable $1,418.10; credit Cash $12,250,00 Debit Interest Expense $13,668.10, credit Discount on Bonds Payable $1,418.10, credit Cash $12,250.00 Debit Interest Expense $12,250.00, credit Cash $12.250.00 Debit interest Expense $13,668.10; credit Premium on Bonds Payable $1,418.10; credit Cash $12,250,00 Debit interest Payable $12.250.00; credit Cash $12.250.00
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