Blanding Company Issues $1 000 000 of 8%, 10- Year

question 1

Multiple Choice

Blanding Company issues $1 000 000 of 8%, 10- year debentures at 98 on 28 February 2014. The debenture pays interest on 28 February and 31 August. The market rate of interest on the issue date was 10%. Assume Blanding uses the straight- line method for amortisation. The journal entry to record the first interest payment on 31 August 2014 would be a:

• A)debit to Discount on debentures payable for $1 000.
• B)debit to Cash for $40 000.
• C)debit to Interest expense for $39 000.
• D)debit to Interest expense for $41 000.

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Definitions:

Disruptive Mood Dysregulation Disorder

A psychiatric disorder characterized by severe and recurrent temper outbursts that are disproportionate to the situation and developmental level.

Bipolar Disorder

Bipolar disorder is a mental health condition characterized by extreme mood swings, including episodes of mania and depression.

Depression

A mental health disorder marked by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.

Anxiety

A feeling of worry, nervousness, or unease typically about an imminent event or something with an uncertain outcome.