The Following Information Applies to Both Questions 77 and 78

question 10

Multiple Choice

The following information applies to both questions 77 and 78.
On October 1, 2014 Macklin Corporation issued 5%, 10-year bonds with a face value of $4,000,000 at 104. Interest is paid on October 1 and April 1, with any premiums or discounts amortized on a straight-line basis.
-The entry to record the issuance of the bonds would include a credit of

• A) $100,000 to Interest Payable.
• B) $160,000 to Discount on Bonds Payable.
• C) $3,840,000 to Bonds Payable.
• D) $160,000 to Premium on Bonds Payable.

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Definitions:

Felony

A crime—such as arson, murder, rape, or robbery—that carries the most severe sanctions, usually ranging from one year in a state or federal prison to the forfeiture of one’s life.

Imprisonment

The state of being confined in jail or prison as a legal punishment for crimes committed.

Criminally Liable

Being legally responsible for a crime, with potential for penalties such as fines or imprisonment.

Stolen

Refers to property that has been taken without permission or consent, violating the legal rights of the owner.