Given the Following Information from an Amortization Table for December

question 38

Multiple Choice

Given the following information from an amortization table for December 31, prepare the journal entry to record the payment of interest. $$\begin{array} { | c | c | c | c | } \hline \begin{array} { c } 6 \% \text { Cash } \\\text { Interest }\end{array} & \begin{array} { c } 7 \% \text { Effective } \\\text { Interest }\end{array} & \begin{array} { c } \text { Premium } \\\text { Amortization }\end{array} & \begin{array} { c } \text { Carrying } \\\text { Value }\end{array} \\\hline \$ 42,000 & \$ 35,651 & \$ 6,349 & \$ 507,567 \\\hline\end{array}$$

• A) Journal Entry \[\begin{array} { | l | l | r | r | }
• \hline & { \text { Account } } & { \text { Debit } } & { \text { Credit } } \\
• \hline \text { December 31 } & \text { Interest Expense } & 35,651 & \\
• \hline & \text { Discount on Bonds Payable } & 6,349 & \\
• \hline & \text { Cash } & & 42,000 \\
• \hline
• \end{array}\]
• B) Journal Entry \[\begin{array} { | l | l | r | r | }
• \hline &{ \text { Account } } &{ \text { Debit } } & { \text { Credit } } \\
• \hline \text { December 31 } & \text { Interest Expense } & 35,651 & \\
• \hline & \text { Discount on Bonds Payable } & 6,349 & \\
• \hline & \text { Bonds Payable } & & 42,000 \\
• \hline
• \end{array}\]
• C) Journal Entry \[\begin{array} { | l | l | r | r | }
• \hline & { \text { Account } } &{ \text { Debit } } &{ \text { Credit } } \\
• \hline \text { December 31 } & \text { Interest Expense } & 35,651 & \\
• \hline & \text { Premium on Bonds Payable } & 6,349 & \\
• \hline & \text { Cash } & & 42,000 \\
• \hline
• \end{array}\]
• D) Journal Entry \[\begin{array} { | l | c | r | r | }
• \hline & \text { Account } &{ \text { Debit } } &{ \text { Credit } } \\
• \hline \text { December 31 } & \text { Interest Payable } & 42,000 & \\
• \hline & \text { Premium on Bonds Payable } & & 6,349 \\
• \hline & \text { Interest Expense } & & 35,651 \\
• \hline
• \end{array}\]

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Definitions:

Federated Organization

A type of organization characterized by a central governing body connected to independent units or member entities, allowing for both centralized control and decentralized operations.

Takeovers

The acquisition of control over a company by another entity, typically through the purchase of a majority of its stock shares.

Accountability

Accountability in organizational contexts involves the obligation of individuals or entities to explain and accept responsibility for their actions, decisions, and outcomes.

Integration

The process of combining or coordinating separate parts or elements into a unified whole, often used in reference to systems, organizations, or societal contexts.