On January 1, 2018, Oman Cables Industry (SAOG) issued 12% bonds dated January 1, 2018, with a principal amount of OR20 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Note: to determine the price of bonds, you should use tables (2) present value of $1 and (4) present value of an ordinary annuity of$1 to find the appropriate P.V. factors to calculate the interest and principal. The appropriate journal entry to record interest on June 30, 2018, using the effective interest method is: Select one: a. Interest expense 1,124,623 Premium on bonds payable 75,377 Cash 1,200,000 O b. Interest expense 1,102,009 Premium on bonds payable 97,991 Cash 1,200,00 c. Interest expense 1,275,377 Discount on bonds payable 75,377 Cash 1,200,000 d. Interest expense 1,128,391 Premium on bonds payable 71,609 Cash 1,200,000
On January 1, 2018, Oman Cables Industry (SAOG) issued 12% bonds dated January 1, 2018, with a principal amount of OR20 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Note: to determine the price of bonds, you should use tables (2)
Select one:
a. Interest expense 1,124,623 Premium on bonds payable 75,377 Cash 1,200,000 O
b. Interest expense 1,102,009 Premium on bonds payable 97,991 Cash 1,200,00
c. Interest expense 1,275,377 Discount on bonds payable 75,377 Cash 1,200,000
d. Interest expense 1,128,391 Premium on bonds payable 71,609 Cash 1,200,000
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