On January 1, a Company Issues Bonds Dated January 1

question 27

Multiple Choice

On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $312,177.
-The journal entry to record the first interest payment using the effective interest method of amortization is:

• A) Debit Bond Interest Expense $12,282.30; debit Premium on Bonds Payable $1,217.70; credit Cash $13,500.00.
• B) Debit Bond Interest Expense $14,717.70; credit Premium on Bonds Payable $1,217.70; credit Cash $13,500.00.
• C) Debit Interest Payable $13,500; credit Cash $13,500.00.
• D) Debit Bond Interest Expense $12,487.08; debit Discount on Bonds Payable $1,012.92; credit Cash $13,500.00.
• E) Debit Interest Expense $12,487.08; debit Premium on Bonds Payable $1,012.92; credit Cash $13,500.00.

---

Definitions:

HR Supply

The availability of potential employee resources that a company can draw upon to meet its human capital needs.

Trust and Mutual Commitment

The belief in the reliability, truth, ability, or strength of a party, coupled with a pledge to maintain a relationship over time.

Retention Problems

Issues faced by organizations in keeping their valued employees from leaving.

Vacancy Analysis

An assessment to identify current or future job openings within an organization, considering factors such as current staffing levels, future needs, and skill requirements.