On January 1, a Company Issues Bonds Dated January 1

question 179

Multiple Choice

On January 1, a company issues bonds dated January 1 with a par value of $600,000. The bonds mature in 3 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31.
-The bonds are sold for $564,000. The journal entry to record the first interest payment using straight-line amortization is:

• A) Debit Interest Expense $27,000; credit Discount on Bonds Payable $6,000; credit Cash $21,000.
• B) Debit Interest Expense $21,000; credit Premium on Bonds Payable $6,000; credit Cash $15,000.
• C) Debit Interest Expense $21,000; credit Cash $21,000.
• D) Debit Interest Expense $15,000; debit Discount on Bonds Payable $6,000; credit Cash $21,000.
• E) Debit Interest Payable $21,000; credit Cash $21,000.

---

Definitions:

Vitamin B12 Shot

An injection containing vitamin B12, often administered to treat or prevent B12 deficiency and its associated symptoms.

Medical Assistant

A healthcare professional who performs administrative and clinical tasks to support patient care and the operation of healthcare facilities.

Oral Medication

Medicines taken by mouth to be absorbed through the digestive system, available in forms such as tablets, capsules, or liquids.

Infusion

A slow drip, as of an intravenous solution into a vein.