QUESTION 24 On January 1, 2015, a company issues 5-year bonds with a stated interest rate of 6% and records the following journal entry: Dr. Cash $480,000 Dr. Discount on bonds payable $20,000 Cr. Bonds payable $500,000 The bonds pay interest annually, on Dec. 31, which is when the company's fiscal year ends. The journal entry made on January 1, 2020, when the bonds mature will include: O a. A credit to cash for $480,000 and a debit to bonds payable for $500,000. O b. A credit to cash for $500,000 and a debit to bonds payable for $500,000. OC. A debit to cash for $500,000 and a credit to bonds payable for $500,000. Od. A debit to cash for $480,000 and a credit to bonds payable for $500,000.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Question 24
QUESTION 24
On January 1, 2015, a company issues 5-year bonds with a stated interest rate of 6% and records the following journal entry:
Dr. Cash $480,000
Dr. Discount on bonds payable $20,000
Cr. Bonds payable $500,000
The bonds pay interest annually, on Dec. 31, which is when the company's fiscal year ends.
The journal entry made on January 1, 2020, when the bonds mature will include:
O a. A credit to cash for $480,000 and a debit to bonds payable for $500,000.
O b. A credit to cash for $500,000 and a debit to bonds payable for $500,000.
OC. A debit to cash for $500,000 and a credit to bonds payable for $500,000.
Od. A debit to cash for $480,000 and a credit to bonds payable for $500,000.
Transcribed Image Text:QUESTION 24 On January 1, 2015, a company issues 5-year bonds with a stated interest rate of 6% and records the following journal entry: Dr. Cash $480,000 Dr. Discount on bonds payable $20,000 Cr. Bonds payable $500,000 The bonds pay interest annually, on Dec. 31, which is when the company's fiscal year ends. The journal entry made on January 1, 2020, when the bonds mature will include: O a. A credit to cash for $480,000 and a debit to bonds payable for $500,000. O b. A credit to cash for $500,000 and a debit to bonds payable for $500,000. OC. A debit to cash for $500,000 and a credit to bonds payable for $500,000. Od. A debit to cash for $480,000 and a credit to bonds payable for $500,000.
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