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

question 135

Multiple Choice

On January 1,a company issues bonds dated January 1 with a par value of $400,000.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 8% and the bonds are sold for $383,793.The journal entry to record the first interest payment using straight-line amortization is:

• A)Debit Interest Payable $14,000.00;credit Cash $14,000.00.
• B)Debit Interest Expense $14,000.00;credit Cash $14,000.00.
• C)Debit Interest Expense $15,620.70;credit Discount on Bonds Payable $1,620.70;credit Cash $14,000.00.
• D)Debit Interest Expense $12,379.30;debit Discount on Bonds Payable $1,620.70;credit Cash $14,000.00.
• E)Debit Interest Expense $15,620.70;credit Premium on Bonds Payable $1,620.70;credit Cash $14,000.00.

---

Definitions:

Fracture

Broken cartilage or bone.

NEC

Not Elsewhere Classified, used in coding systems for conditions that don't have a specific category allocation.

Not Elsewhere Classifiable

A term used in coding and classification systems for instances that do not fit into any existing categories.

Non-Elective Contraindication

A situation where medical treatment must not be used due to the risk of harm and the treatment is not chosen by the patient or provider.