A Company Sells a Bond with a Face Value of $10,000

question 173

Multiple Choice

A company sells a bond with a face value of $10,000 and receives a premium of $800.Using simplified effective-interest amortization,what journal entry is used to record the issuance of the bonds?

• A)Debit Cash for $10,800 and credit Bonds Payable,Net for $10,800.
• B)Debit Cash for $10,800,credit Bonds Payable,Net for $10,000,and credit Premium on Bond Payable for $800.
• C)Debit Cash for $10,000,debit Interest Expense for $800,credit Bonds Payable,Net for $10,000,and credit Premium on Bonds Payable for $800.
• D)Debit Cash for $10,000,debit Interest Expense for $800,credit Bonds Payable for $10,000,and credit Premium on Bonds Payable for $800.

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Definitions:

Karl Marx

A 19th-century philosopher, economist, and revolutionary socialist who developed the theory of Marxism, focusing on class struggle and the need for a proletariat revolution.

Sociological Imagination

The ability to see the relationship between individual experiences and the larger society.

Coined

The process of inventing a new word or phrase.

Sociology

The study of the development, structure, and functioning of human society, including the examination of social problems.