Chapter 14, Problem 10BQC

10B Hicks Corporation issued S500.000 of 5%, 10-year bonds payable at a price of 92. The market interest rate at the date of issuance was 6%, and the bonds pay interest semiannually. The journal entry to record the first semiannual interest payment using the effective-interest amortization method is

Learning Objective 8 Appendix 14B

Date	Accounts and Explanation	Debit	Credit
a.	Interest ExpenseDiscount on Bonds PayableCash	14,500	2,00012,500
b.	Interest ExpenseDiscount on Bonds PayableCash	13,800	1,30012,500
c.	Interest ExpenseDiscount on Bonds PayableCash	17,000	2,00015,000
d.	Interest ExpenseDiscount on Bonds PayableCash	16,300	1,30015,000