On January 1,a Company Issues Bonds Dated January 1 with a Par

question 66

Multiple Choice

On January 1,a company issues bonds dated January 1 with a par value of $300,000.The bonds mature in 5 years.The contract rate is 9%,and interest is paid semiannually on June 30 and December 31.The market rate is 8% and the bonds are sold for $312,177.The journal entry to record the issuance of the bond is:

• A)Debit Cash $312,177;credit Discount on Bonds Payable $12,177;credit Bonds Payable $300,000.
• B)Debit Cash $300,000;debit Premium on Bonds Payable $12,177;credit Bonds Payable $312,177.
• C)Debit Bonds Payable $300,000;debit Bond Interest Expense $12,177;credit Cash $312,177.
• D)Debit Cash $312,177;credit Premium on Bonds Payable $12,177;credit Bonds Payable $300,000.
• E)Debit Cash $312,177;credit Bonds Payable $312,177.

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Definitions:

Thorndike

An American psychologist famous for his work on learning theory that led to the development of operant conditioning within behaviorism.

Latent Learning

Learning that occurs without any obvious conditioning or immediate display of behavior and manifests later when suitable.

Extinction

In psychology, the gradual weakening of a conditioned response that results in the behavior decreasing or disappearing.

Generalization

The ability to apply the lessons learned from specific instances to broader, similar situations without being explicitly taught for every situation.