On January 1, a company issues bonds dated January 1 with a par value of $200,000. 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 6% and the bonds are sold for $208,531. The journal entry to record the first interest payment using straight-line amortization is: (Rounded to the nearest dollar.) Multiple Choice Debit Bond Interest Expense $7,853; credit Discount on Bonds Payable $853; credit Cash $7,000. Debit Bond Interest Expense $7,853; credit Premium on Bonds Payable $853; credit Cash $7,000. Debit Bond Interest Expense $6,147; debit Premium on Bonds Payable $853; credit Cash $7,000. Debit Interest Payable $7,000; credit Cash $7,000. Debit Bond Interest Expense $6,147; debit Discount on Bonds Payable $853; credit Cash $7,
On January 1, a company issues bonds dated January 1 with a par value of $200,000. 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 6% and the bonds are sold for $208,531. The
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Debit Bond Interest Expense $7,853; credit Discount on Bonds Payable $853; credit Cash $7,000.
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Debit Bond Interest Expense $7,853; credit Premium on Bonds Payable $853; credit Cash $7,000.
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Debit Bond Interest Expense $6,147; debit Premium on Bonds Payable $853; credit Cash $7,000.
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Debit Interest Payable $7,000; credit Cash $7,000.
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Debit Bond Interest Expense $6,147; debit Discount on Bonds Payable $853; credit Cash $7,000.
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