Warner Company Issued $5,000,000 of 6%, 10-Year Bonds on One

question 114

Multiple Choice

Warner Company issued $5,000,000 of 6%, 10-year bonds on one of its interest dates for $4,318,500 to yield an effective annual rate of 8%.The effective-interest method of amortization is to be used.The journal entry on the first interest payment date, to record the payment of interest and amortization of discount will include a

• A)debit to Bond Interest Expense for $300,000.
• B)credit to Cash for $345,481.
• C)credit to Discount on Bonds Payable for $45,480.
• D)debit to Bond Interest Expense for $400,000.

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Definitions:

Overall Decline

A general decrease or deterioration in condition, quality, or level over time.

Aging

The natural and gradual process of becoming older, involving biological, physiological, environmental, and psychological changes.

Type AB

refers to a blood type in the ABO blood group system characterized by the presence of both A and B antigens on the surface of red blood cells.

Type O

Type O blood type is characterized by the absence of A and B antigens on red cells, making it a universal donor type for blood transfusions.