Osbourne Oasis, Inc. is running short on cash. Osbourne decides to sell bonds to help with the cash problem. On January 1, 2022 Osbourne sells $1,000,000, 3-year bonds with a coupon rate of 3% payable annually. The market rate of interest was 4%. What would the journal entry be to record the first payment of interest on 12/31/22? Dr. Interest Expense $38,890, Cr. Bonds Payable $8,890, Cr. Cash $30,000 O Dr. Interest Expense $30000, Dr. Bonds Payable $8,890. Cr. Cash $38,890 O Dr. Interest Expense $30,000, Cr. Cash $30,000
Osbourne Oasis, Inc. is running short on cash. Osbourne decides to sell bonds to help with the cash problem. On January 1, 2022 Osbourne sells $1,000,000, 3-year bonds with a coupon rate of 3% payable annually. The market rate of interest was 4%. What would the journal entry be to record the first payment of interest on 12/31/22? Dr. Interest Expense $38,890, Cr. Bonds Payable $8,890, Cr. Cash $30,000 O Dr. Interest Expense $30000, Dr. Bonds Payable $8,890. Cr. Cash $38,890 O Dr. Interest Expense $30,000, Cr. Cash $30,000
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 2PA: On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The...
Related questions
Question
![Osbourne Oasis, Inc. is running short on cash. Osbourne decides to sell bonds to help with the cash
problem. On January 1, 2022 Osbourne sells $1,000,000, 3-year bonds with a coupon rate of 3%
payable annually. The market rate of interest was 4%. What would the journal entry be to record
the first payment of interest on 12/31/22?
STON
Dr. Interest Expense $38,890, Cr. Bonds Payable $8,890, Cr. Cash $30,000
Dr. Interest Expense $30000, Dr. Bonds Payable $8,890, Cr. Cash $38,890
Dr. Interest Expense $30,000, Cr. Cash $30,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc7cdeda0-e51d-40f1-9e69-3ed0a65ba448%2Fd7da84a5-7924-4912-b670-17b14d2ea43b%2Fv2g5lxd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Osbourne Oasis, Inc. is running short on cash. Osbourne decides to sell bonds to help with the cash
problem. On January 1, 2022 Osbourne sells $1,000,000, 3-year bonds with a coupon rate of 3%
payable annually. The market rate of interest was 4%. What would the journal entry be to record
the first payment of interest on 12/31/22?
STON
Dr. Interest Expense $38,890, Cr. Bonds Payable $8,890, Cr. Cash $30,000
Dr. Interest Expense $30000, Dr. Bonds Payable $8,890, Cr. Cash $38,890
Dr. Interest Expense $30,000, Cr. Cash $30,000
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
![EBK CONTEMPORARY FINANCIAL MANAGEMENT](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
![Financial Reporting, Financial Statement Analysis…](https://www.bartleby.com/isbn_cover_images/9781285190907/9781285190907_smallCoverImage.gif)
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
![EBK CONTEMPORARY FINANCIAL MANAGEMENT](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
![Financial Reporting, Financial Statement Analysis…](https://www.bartleby.com/isbn_cover_images/9781285190907/9781285190907_smallCoverImage.gif)
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
![Financial Accounting: The Impact on Decision Make…](https://www.bartleby.com/isbn_cover_images/9781305654174/9781305654174_smallCoverImage.gif)
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning